Cabo Verde and Guinea-Bissau expected to see economic growth above the global and regional average in 2018

Cabo Verde (Cape Verde) and Guinea-Bissau are expected to post economic growth above the regional and global average in 2018, according to the World Bank, which has also significantly reduced growth forecasts for Mozambique and raised them for Angola.

The Global Economic Outlook report, released last week in Washington by the World Bank, says that economic growth in sub-Saharan Africa is expected to continue increasing compared to 2017 (2.4%) to 3.2 % this year – slightly above the global average (3.1%).

The World Bank’s most recent estimates revise economic growth in Guinea-Bissau by 0.4 percentage points in 2017, to 5.5%.

The Guinean economy is expected to grow 5.2% this year, accelerating to 5.4% next year, the highest growth rate among Portuguese-speaking African countries.

Cabo Verde saw last year’s growth revised upwards by 0.2 percentage points to 3.5%, with the World Bank forecasting an increase to 3.6% this year and 3.8% in 2019 and 2020.

Among the Portuguese-speaking African countries, Angola was the one with the greatest improvement in its economic growth outlook in 2018, with an upward review of 0.7 percentage points to 1.6% due to a “successful political transition,” impacting on “the possibility of reforms that will improve the business environment,” according to the World Bank.

“The region is expected to see a rise in [economic] activity over the forecast horizon, based on the consolidation of commodity prices and the gradual strengthening of domestic demand,” it said.

By 2019 and 2020, the World Bank forecasts growth of 1.5% for the Angolan economy, which is strongly dependent on oil production, the prices of which have risen significantly in recent months.

Conversely, the Mozambican economy was subject to a strong downward review by the World Bank – a drop of 2.9 percentage points this year to 3.2%, slightly above the 3.1% growth rate in 2017 (a downward review of 1.7 percentage points).

“Debt servicing costs remained unsustainable in Mozambique and Chad, underscoring the need for governments in these and other low-income countries to continue their efforts to mobilise domestic revenue and rationalise public spending,” the report said.

By 2019, projected growth for the Mozambican economy is 3.4%, a downward review of 3.3%, which is expected to remain in 2020, according to the World Bank.

The report does not set out forecasts for São Tomé and Príncipe, but those of the International Monetary Fund (IMF) point to an acceleration of economic growth in the archipelago – the latest member of Forum Macau, after it re-established diplomatic relations with China – of 5% in 2017 to 5.5% in 2018. (macauhub)