African economies ‘could be hurt by China slowdown’
International Monetary Fund head Christine Lagarde has warned that African economies could be hurt by a slowdown in China’s economy and an imminent hike in US interest rates.
Lagarde said : “Momentum is slowing in many advanced and emerging economies, including China — one of Africa’s main trading partners.”
She said the overall outlook for sub-Saharan Africa was promising at close to 5%, but growth forecasts for the region have been trimmed due to lower oil and commodity prices.
Countries like Nigeria and South Sudan depend on oil for the majority of their revenues.
Lagarde said some African oil exporters will struggle if oil prices remain low and warned of instability once the United States starts “monetary policy normalization”, which is expected to see the US raise interest rates. This could affect emerging markets and global financial stability. Negatively.
A Reuters poll in January showed China’s economic growth was expected to slip to 7% this year before dipping to 6.8% next year.