Mauritius poised for 4.1% GDP growth in 2014: World Bank
Sub-Saharan Africa’s real Gross Domestic Product (GDP) growth picked up to 4.7% in 2013, making it the second-fastest growing region in the world. (Image: AfDB)
According to the World Bank, Mauritius is poised to achieve higher GDP growth over the next 3 years, moving up to 4.1% in 2014, 4.3% in 2015 and finally 4.2% in 2016.
Also, Sub-Saharan Africa’s real Gross Domestic Product (GDP) growth picked up to 4.7% in 2013, supported by robust domestic demand, notably investment growth, making it the second-fastest growing region in the world.
The Global Economic Prospects report for 2014 by the institutional major went on to forecast the region’s GDP growth at market prices at 5.3% for 2014, 5.4% in 2015 and 5.5% for 2016.
Also, the region’s largest economy, South Africa, is expected to achieve GDP growth of 2.7% this year, 3.4% in 2015 and finally 3.5% in 2016, after a poor showing of 1.9% in 2013.
However, South Africa’s GDP growth stands in sad contrast to the region’s second largest economy, Nigeria, which is expected to shoot ahead with GDP growth forecast at 6.7% in 2014, 6.8% in 2015 and finally 6.8% again in 2016, after robust growth of 6.7% in 2013.
Foreign direct investment (FDI) has also continued to flow in the region, not only in the oil, gas and mining sector but also into non-extractive industries, showing successful diversification by the erstwhile oil-dependent economies. Accordingly, net FDI flows were estimated at a higher $43 billion in 2013, up from $37 billion in 2012.
Moreover, in many countries, governments have launched large investment programs to alleviate infrastructure bottlenecks and increase export capacity. Gross fixed capital formation grew an estimated 7.3% in 2013.
Finally, inflation decelerated in many countries, owing to lower food prices and prudent monetary policy; and the low inflation, combined with an estimated 6.2% increase in remittances helped boost private consumption.
Nevertheless, poverty and unemployment remain high in many countries in the region.
Also, fiscal balances deteriorated further in 2013, especially among oil exporters who faced falling output and lower oil prices. Partly as a result, public debt has risen from 29% of GDP in 2008 to an estimated 34% of GDP in 2013.
For developing countries, the report forecasts growth to pick up from 4.8% in 2013 to a slower than previously expected 5.3% this year, 5.5% in 2015 and 5.7% in 2016.
“We expect developing country growth to rise above 5% in 2014, with some countries doing considerably better, with Angola at 8%, China 7.7%, and India at 6.2%,” said Kaushik Basu, chief economist, World Bank.
Finally, global GDP is projected to grow from 2.4% in 2013 to 3.2% this year, stabilizing at 3.4% and 3.5% in 2015 and 2016, respectively.
Most of the acceleration is expected to come from high-income countries, as the drag on growth from fiscal consolidation and policy uncertainty eases and private sector recoveries gain firmer footing.
“Five years after the global financial crisis, the world economy is showing signs of bouncing back this year, pulled along by a recovery in high-income economies,” highlights the report.