Headlines
Africa: Why Many African Countries will Face economic collapse – IMF
As the effects of the Russian-Ukrainian war grow due to shocks in commodity prices and rising living costs, the International Monetary Fund (IMF) has issued a warning about “economic collapse” in numerous African states.
According to IMF Managing Director Kristalina Georgieva, inflation has risen above expectations and has extended beyond the cost of food and energy, leading major central banks to declare additional monetary tightening.
Many African nations are being hit particularly hard by increases in food and energy prices, and they may require more grants and extremely favorable financing.
Furthermore, the expanding spreads for African economies with weaker fundamentals could result from the rising interest rates in advanced economies, making borrowing more expensive for those countries.
The IMF said that inflation, debt, and the FX crisis are pushing African nations to the breaking point in a report titled “Facing a Darkening Economic Outlook: How the G20 Can Respond.”
The study, which was made public on Wednesday, serves as a preamble to the later meeting in Bali of G20 Ministers and Central Bank Governors.
Georgieva commented on the research and predicted a challenging 2022, and potentially an even more challenging 2023 with a higher probability of recession.
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