Africa Economic Outlook 2023: North Africa's economy grew by 4.6% in 2023, with South Africa hindering Southern Africa's economic recovery.

In July, the African Development Bank (AfDB) released its latest Africa Regional Economic Outlook report. AfDB data indicates that the African economy will maintain a strong recovery momentum in the medium term, with a growth rate higher than the global average.

Regionally, North Africa will see a slight rebound, with economic growth reaching 4.6% in 2023. Economic growth in Southern Africa is slowing, lagging behind other regions of Africa.

In previously published articles, we interpreted the strong momentum of economic recovery in East and West Africa based on the African Development Bank report.

North Africa's economy to grow 4.6% in 2023, highlighting the necessity of economic diversification.

African Development Bank data shows that the macroeconomic outlook for North Africa remains optimistic, higher than the African average.

Economic growth in North Africa is projected to slightly increase to 4.6% in 2023 and 4.4% in 2024, driven primarily by the service sector, especially trade and tourism.

From a country perspective, compared to 2022, Egypt's real GDP growth rate is expected to decrease by 2.2 percentage points in 2023, and Tunisia's by 0.5 percentage points. Libya's economy is projected to achieve a significant recovery in 2023, with a real GDP growth rate as high as 17.9%. Algeria's economic growth is expected to rise slightly, reaching 3.1% in 2023. Morocco will recover from the 2022 drought, with economic growth significantly increasing to 3.3%.

The "North Africa Economic Outlook 2023" report also shows that North Africa's economic growth in 2022 was moderate, with a GDP growth rate of 4.1%, lower than 5.4% in 2021.

North African countries are struggling to cope with rising inflation and the challenges of growth recovery. The region's inflation rate has steadily increased from 4.6% in 2021 to 8.2% in 2022, leading most North African countries to implement restrictive monetary policies.

Inflation is projected to further increase to double digits, reaching 14.2% by 2023, before falling to 6.9% by 2024. Poverty and unemployment rates, especially youth unemployment, have recently risen, highlighting the necessity of strengthening the region's economic resilience and diversification.

To maintain inclusive growth, the region needs to implement structural reforms, promote private sector development, improve productivity and employability, and create job opportunities.

Southern Africa's Economic Outlook Is Bleak, with Slight Rebound to 2.7% Growth in 2024.

The African Development Bank's latest Southern Africa economic report indicates that, heavily impacted by civil unrest, power crises, and natural disasters, the economic outlook for Southern Africa is bleak, with GDP growth lagging behind other African regions.

Over the past year, economic growth in Southern Africa has slowed, with South Africa, the largest economy, facing multiple challenges. AfDB's "Southern Africa Economic Outlook 2023" report data shows that in 2022, Southern Africa's GDP growth barely reached 2.7%, significantly lower than the global and African averages of 3.4% and 3.8%. The report projects that the region's growth will further slow to 1.6% in 2023, followed by a slight improvement to 2.7% in 2024.

The Southern Africa report links the region's slow performance to "South Africa's lingering political and structural issues dragging down regional growth, and the ongoing Russia-Ukraine conflict putting continuous pressure on energy and food prices." The report expects the entire Southern African region's external debt to reach 48% by 2022, with the high debt burden further hindering its economic recovery.

The Southern Africa report also points out that declining per capita income growth in most Southern African countries threatens the growth rates needed for poverty reduction, while weak growth also puts pressure on youth employment. Unemployment is described as "one of the biggest challenges in the region."

According to the African Development Bank's projections, supported by favorable factors, Africa's economic recovery shows a positive trend, with GDP maintaining continuous growth, and in the medium term, Africa's economic growth level will exceed the global average.

However, regional disparities still exist, and the economic performance of different regions and countries will vary. The African Development Bank predicts that the macroeconomic outlook for North Africa remains optimistic, higher than the African average. Southern Africa, on the other hand, is severely affected by climate and has a poor economic outlook in the medium term. Republished from Whale Island.