World Bank warns of economic growth vulnerabilities in Africa
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The World Bank released the Africa’s Pulse report on April 11, in which the multilateral organisation outlined salient economic vulnerabilities and provided strategies for unlocking inclusive, sustainable growth. The report focuses primarily on the economic growth and policy challenges presented by the terms of trade shock posed by the commodity price slump. The large shock to the terms of trade undermined the strength of local currency units (which added greatly to consumer price inflation pressures and inflated the real debt burden), and weakened policy buffers. The resultant increase in external fragility weakened fiscal positions, set off a flurry of credit rating downgrades and increased the probability of balance of payments crises.