The International Monetary Fund now projects Sub Saharan Africa’s economic growth at a3.5 per cent in 2023 in the latest revision, from 3.9 per cent last year.
It however says the growth will witness a rebound to 4.1 per cent next year.
In April, the lender had projected the region’s GDP growth to decline to 3.6 per cent, before rebounding to 4.2 per cent in 2024, amid the global slowdown, as activities were expected to decelerate for a second year in a row.
This is a 100 basis points downgrade projection for both years.
However, the lender is hopeful that next year's rebound next year will be as a result of the anticipated global recovery, subsiding inflation, and a wind down in monetary policy tightening.
IMF attributes the latest weaker projection to the unceasing rise of central bank policy rates to fight inflation.
“The hiked rates continue to weigh on economic activity. However, the global headline inflation is expected to fall from 8.7 per cent in 2022 to 6.8 per cent this year and 5.2 per cent in 2024,” IMF says.
In the previous regional outlook, the lender projected Kenya’s GDP growth to a slow of 5.3 per cent this year.
This was down from the previous two years' projections of 5.4 per cent in 2022 and 7.5 per cent in 2021.
It attributed the slower growth to a funding squeeze that is impacting the country's ability to invest in health, education and infrastructure.
IMF further projected the country's economic prospects to grow by 5.4 per cent in 2024.
The East African country with its counterparts, were expected to fare better this year in contributing to the SSA region growth.
However some major economies were projected to bring down the region’s average growth rate.
The lender highlighted South Africa as an example, whose growth was projected to decelerate sharply to only 0.1 per cent this year.
In the latest review, South Africa has been projected to grow at 0.3 per cent this year, an upgrade, before rebounding to 1.7 per cent next year.
Globally, the lender’s revision projects a GDP growth of 3.0 per cent this year and next year.
This is a 0.2 per cent upgrade from the previous projection of 2.8 per cent in April.
However, the projection is a downgrade from the previous year of 3.5 per cent, with the lender saying the growth rate is still historically weak based on standards.