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Vol 50 No 21

Published 23rd October 2009

A year after the crash

Facing stubbornly high food prices, rising joblessness and investment cutbacks, Africa is lagging behind the economic recovery in Asia

A faint self-congratulatory whiff of a 'great depression averted' wafted through the annual meetings of the International Monetary Fund and World Bank in Istanbul, Turkey, on 4-5 October. Yet many of the detailed policy discussions between central bankers, business people and international finance institution officials showed that most of the world's finance ministers were still on rescue duty. There will be no early exits from fiscal stimulus programmes. The green shoots of recovery in Brazil, China and India are not enough to counter rising unemployment worldwide. Africa's green shoots are far off, as the IMF's latest Regional Economic Outlook for Africa underlines: average GDP growth next year is forecast to rise to 4% from about 3% in 2009. Certainly Africa is in a much stronger macroeconomic position after a decade of reform and a boom in commodity prices but that is little comfort to the most vulnerable countries. Currencies are more stable, budget deficits and inflation are sharply lower but few governments have used that as a platform to start medium-term restructuring of their economies.

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