Southern Africa Economic Outlook 2018
The economic outlook for the Southern Africa region is cautious. Broad-based economic activity is expected to recover at a slow pace, but the outlook remains modest, given the diverging growth patterns for the region’s economies. Upper middle-income countries turned in low and declining rates of growth. Meanwhile, lower income transitioning economies recorded moderate and improved growth, albeit at reduced rates. Despite the improvement, economic performance remains below the regional target of 7 percent annual economic growth for all member states. The region’s economic outlook continues to face major headwinds: high unemployment, scale strain, increasing debt, and high in action. Real GDP is estimated to have grown at an average of 1.6 percent for 2017, before increasing to a projected 2.0 percent in 2018. Future regional growth is bolstered primarily by expectations of increased investment in non-oil sectors such as electricity, construction, and technology, in large infrastructure projects, and in mining, as well as a continued recovery of commodity prices. Net commodity exporters and low-income economies, generally, are outperforming their larger net manufacturing exporter counterparts. The decline in commodity prices in recent years, reaching their lowest point in 2015, translated into significant income losses for these economies, implying negative impacts on public and private sector spending, and therefore growth and employment.