## IMF Calls for Prompt Policy Action to Secure a Rebound in Growth

_IMF News, October 25, 2016_

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## Bibliographic details
- Published: October 25, 2016

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### Key findings and outlook
- Economic growth in sub-Saharan Africa in 2016 is projected to be just 1.4 percent—well below population growth and the slowest level in more than 20 years.
- The slowdown reflects two broad factors:
  - Deterioration of the external environment, notably with commodity prices at multi-year lows and markedly tighter financing conditions.
  - Delayed and inadequate policy responses in many of the most-affected countries, raising uncertainty, deterring private investment, and stifling new sources of growth.
- Aggregate growth masks considerable diversity across the region:
  - Most non-commodity exporting countries—representing close to half of the countries in the region—continue to perform well.
  - Countries cited as expected to continue to grow at more than 6 percent: Côte d’Ivoire, Ethiopia, Senegal, and Tanzania.
  - Most commodity exporters are under severe economic strain; oil exporters have seen near-term prospects worsen significantly as the initial oil price shock spreads through their economies.
  - Conditions in many non-oil commodity exporters remain difficult, including in South Africa where output expansion is expected to stall this year.

### Projection and scenario
- Subject to reforms being initiated quickly in the coming months, growth would recover close to 3 percent in 2017.
- The recovery scenario depends on prompt action in the hardest-hit countries, especially oil exporters.
- Further delays in addressing elevated macroeconomic imbalances are certain to undermine growth prospects further and delay a robust and job-rich recovery.

### Policy analysis and recommendations
- Given the scale and persistent nature of the shock and exhaustion of existing buffers, a comprehensive three-pronged adjustment effort is needed urgently:
  - Strong fiscal adjustment.
  - Enhanced social protection policies.
  - Structural reforms to facilitate competitiveness and diversification.
- Prompt, sustained policy adjustment is particularly needed in African resource exporters; oil producers are hardest hit and require immediate action to prevent a deeply entrenched slowdown.
- A comprehensive and internally coherent set of policies to reestablish macroeconomic stability is needed in the hardest-hit countries to realize the region’s considerable economic potential.

*Press Release No. 16/464, October 25, 2016 — International Monetary Fund*

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## References

- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [October 2016 Regional Economic Outlook for Sub-Saharan Africa titled Multispeed Growth](http://www.imf.org/external/pubs/ft/reo/2016/afr/eng/sreo1016.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2016/10/21/pr16464-imf-calls-for-prompt-policy-action-to-secure-a-rebound-in-growth_