IMF cuts SA's growth forecast again
The IMF said the global economic slowdown is worsening as it cut its growth forecasts for the second time since April, and warned US and European policymakers that failure to fix their economic ills would prolong the slump.
Global growth in advanced economies is too weak to bring down unemployment, and what little momentum exists is coming primarily from central banks, the IMF said in its World Economic Outlook, released ahead of its twice-yearly meeting, which will be held in Tokyo later this week.
The IMF shaved its 2012 projections for Africa to 5% from 5.4%.
However, it revised up its 2013 outlook to 5.7% from 5.3%.
It said spillovers from the eurozone crisis into Africa have so far been modest except for South Africa, which has close financial and trading ties with Europe.
The IMF cut its 2013 forecast for South African growth to 3% from a July projection of 3.3%, mainly due to the impact from the continuing eurozone debt crisis. It maintained its 2012 projection of 2.6%.
"If the euro area crisis escalates further and global growth slows further, sub-Saharan Africa's prospects will be less favourable.
"South Africa, strongly linked to Europe, would be particularly affected, with possible repercussions for some economies in Southern Africa," it said.
"Softer commodity prices would adversely affect the region's natural resource exporters," it added.
The IMF cautioned that African countries could be hit as China's growth is expected to be the lowest in more than a decade this year.
Increasing Chinese foreign direct investment and funding to African countries has made it an important player in the region.
Emerging markets are still expected to grow four times as fast as advanced economies, but the IMF cut estimates for India and Brazil.