Despite a surge in inflation in 2011 that prompted a sharp tightening of monetary policies in East African countries, accommodative macroeconomic policies will make the region post stronger growth in 2013, the International Monetary Fund (IMF) has said.
The IMF says East Africa and sub-Saharan African economies at large will continue growing at a slightly higher rate than the global economy against the backdrop of difficult external conditions, including the escalation of the Euro area crisis. The Fund expects the world economy to expand by just 3.3% this year and 3.6% in 2013, as growth slows in nearly every major nation as political uncertainties threaten recoveries in the U.S. and euro zone
The IMF World Economic Outlook launched in Tokyo on October 9 ahead of the IMF-World Bank annual meetings that kick off today, shows that Uganda's economy will grow at 4.2% in 2012 and 5.7% in 2013, while Tanzania's will grow at 6.5% and 6.8% in 2012 and 2013 respectively.
It says Kenya, the East African economic power house, will grow at 5.1% and 5.6% in 2012 and 2013 respectively. Speaking at the launch, the IMF Economic Counsellor and Director of Research department, Olivier Blanchard, said while the world economic recovery continues, the economy has weakened further.
"In advanced countries, growth is now too low to make a substantial dent on unemployment. And in major emerging countries, growth which had been strong earlier has also decreased," Blanchard said.
At the IMF's annual meeting in Tokyo this week being attended by 20,000 delegates, officials from the Fund's 188 member countries are expected to press Europe and the US to move more expeditiously as the threat of a deeper downturn looms. Central banks in both economies have stepped up in recent weeks to ease strains, but politicians remain deadlocked on key issues.
The sober forecast offers policymakers here a reminder that, while financial markets in advanced economies have been relatively calm in recent weeks, that doesn't signal a fundamental global turnaround. Some of the key issues in the meetings will be managing increasing volatility and building resilience to deal with shocks and tracking the progress of managing debt.
The annual meetings of the International Monetary Fund and the World Bank Group, held in the autumn of each year, are formal gatherings of the boards of governors--the highest decision-making bodies of the two organizations.
The 2012 meeting will mark the second time this event has been held in Japan - the first such meeting was held in 1964. The year will also mark the 60th anniversary of Japan's membership to the Fund and the Bank.