Africa > Uganda
Abstract
Sub-Saharan Africa's prospects have deteriorated somewhat and the risks have increased, according to this report. Growth in the region is projected to dip to 6 percent in 2008 and 2009. The fall is due mainly to the global food and fuel price shock, which has weighed particularly on growth in oil-importing countries, and to the global financial market turmoil, which has slowed global growth and demand for Africa's exports. Inflation is expected to rise to 12 percent in 2008, mainly on account of the food and fuel price shock. As a result of rising prices, particularly of food, poverty may well be on the increase in 2008. In 2009, inflation should ease to 10 percent, helped by recent commodity price declines. There are significant risks to the outlook related to a potentially deeper and longer period of global financial turmoil and resulting slowdown in global activity, and substantial uncertainty concerning commodity prices.
Abstract
The region's prospects look strong. Growth in sub-Saharan Africa should reach 6 percent in 2007 and 6¾ percent in 2008. The economic expansion is strongest in oil exporters but cuts across all country groups. This would extend a period of very good performance. In recent years, sub-Saharan Africa has been experiencing its strongest growth and lowest inflation in over 30 years.
Rapid output growth and low inflation are the most common objectives of macroeconomic policy. It is rather surprising, therefore, that a consensus about the relationship between these two variables is yet to emerge. While early studies by Phillips (1958) suggested an exploitable trade-off between output and price stability, the stagflationary experience of the industrialized countries in the 1970s belied this finding and showed that, beyond the short run, any such trade-off is illusory. More recent cross-country studies, particularly those that include middle- and low-income countries in their samples, suggest a negative relationship between growth and inflation.1 Even among these studies, however, there is little agreement on whether the empirical association of lower inflation with faster growth is statistically and economically significant, let alone causal.2
Abstract
Growth should reach 6 percent in 2007 (Table 1.1 and Figure 1.1), slightly lower than projected in the April Regional Economic Outlook: Sub-Saharan Africa but up from 5½ percent in 2006.1 The expansion partly reflects rising production in oil exporters and strong domestic investment in oil importers, fueled by continued progress with macroeconomic stability and reforms in most countries. The region also benefited from the external environment, including solid demand for commodities, increased capital inflows, and debt relief.
Abstract
In recent years countries in sub-Saharan Africa have enjoyed some of their highest growth rates in decades, thanks both to favorable external conditions and improved domestic policies. In late 2007 and early 2008, however, the global environment deteriorated, as noted in the Spring 2008 Regional Economic Outlook: Sub-Saharan Africa (REO). Since then it has become even more challenging. Food and fuel prices have risen further, global financial markets have become more turbulent, and the global slowdown is expected to deepen. In particular
Abstract
Many sub-Saharan African countries have been successful in their progress toward stabilizing their economies, thereby easing constraints on fiscal policy. The success in macroeconomic stabilization is reflected in strong growth, single-digit inflation, sustainable external current accounts, and high reserves, as outlined in Chapter 1 (Table 1.1). Debt relief has substantially improved debt sustainability. The G-7 countries have also promised to scale up aid to sub-Saharan Africa. Consequently, there is now less need to gear fiscal policy toward addressing macroeconomic imbalances.