Despite a positive per capita income, sub-Saharan African risks outlook remains tilted to the downside, the World Bank said Tuesday.
In its “Global Economic Prospects report”, the bank said a faster-than-expected tightening of monetary policy in advanced economies could dampen investor appetite for higher risk assets in frontier markets, adding that while political transitions in several countries have opened opportunities for reform, there is also the risk of a
weakening of existing reform efforts.
According to the report, the recurrence of drought is another significant downside risk to the regional outlook, and could severely disrupt the economic recovery.
But, the bank said the projected growth was not considered fast enough to meet expectations.
The bank had in April forecast global economic growth to edge up to 3.1 percent in 2018 after a much stronger-than-expected 2017, as the recovery in investment, manufacturing and trade continues, and as commodity-exporting developing economies benefit from firming commodity prices.
But the bank said the projected growth was not considered fast enough to meet expectations.
Growth in advanced economies is expected to moderate slightly to 2.2 percent in 2018, as central banks gradually remove their post-crisis accommodation and as an upturn in investment levels off.
Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5 percent in 2018, as activity in commodity exporters continues to recover.
It said: “Risks to the outlook remain tilted to the downside. An abrupt tightening of global financing conditions could derail the expansion. Escalating trade restrictions and rising geopolitical
tensions could dampen confidence and activity.
“On the other hand, stronger-than-anticipated growth could also materialize in several large economies, further extending the global upturn”.