http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.39Change: -0.07
R/$ = 10.74Change: -0.06
Au 1285.05 $/ozChange: 2.80
Pt 1460.50 $/ozChange: -0.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 31, 2012

Europe a key risk to Africa’s 2012 growth outlook – AfDB economist

Back
Africa|Development Bank|Industrial|Africa|Europe|North America|China|South Africa|Bank|Mthuli Ncube|Pravin Gordhan|North Africa|Sub-Saharan Africa
Africa|Industrial|Africa|||||
africa-company|development-bank|industrial|africa|europe|north-america|china|south-africa|bank|mthuli-ncube|pravin-gordhan|north-africa|subsaharan-africa
© Reuse this



Africa’s 2012 economic growth outlook is facing headwinds from a range of sources, not least the current crisis in Europe, African Development Bank (AfDB) chief economist Professor Mthuli Ncube has warned.

The bank currently expects continent-wide growth of 4.5% in 2012, underpinned by a sub-Saharan Africa economic expansion of 5.3% – excluding slow-growing South Africa, the rate of growth in the rest of the sub-region is estimated at 5.9% for the year.

But the outlook is highly sensitive to the economic fortunes or misfortunes of Europe, with Ncube indicating that a one per cent fall in the territory’s growth will shave 0.5% off African economic growth.

Lower European growth will be felt primarily through lower export earnings and a decrease in tourism-related earnings, especially in North Africa, which is still stabilising from the after effects of the ‘Arab Spring’.

But there is also a risk of lower financial inflows in the form of aid, investment and remittances, as well as the potential for “contagion effects” spreading to African banks.

Ncube is also concerned that China, which acted as a key shock absorber during the earlier phases of the global economic crisis, may not be in a position to offer such support this time around.

The slowdown in China poses a particular risk for African commodity exporters, as it could send a “negative signal” on commodity prices.

The AfDB has already revised lower its growth outlook for South Africa, Africa’s largest economy, from 3.2% earlier in the year to around 2.9%.

The revision is in line with downgrades reported recently by the South African Reserve Bank (from 2.9% to 2.7%) and the World Bank (from 3.1% to 2.5%). Finance Minister Pravin Gordhan has also indicated that growth is likely to fall short of the 2.7% forecast by the National Treasury in February.

The World Bank warns that South Africa is vulnerable to both the slowing economies of Europe, which consumes many of its industrial exports, as well as to a slowdown in China, which consumes many of its commodities.

For Africa as a while, Ncube also warns of other headwinds, including the potential for rising inflation, food price shocks in light of the drought conditions in North America and uncertainties surrounding the oil price outlook.

Nevertheless, he is convinced that several internal and external growth drivers remain intact and that African countries will continue to grow faster than the global average.
 

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Economy News
A well-defined corporate culture, philosophy and principles, along with industry experts in all of its diverse industry channels, enable information technology (IT) services company EOH to achieve strong and sustained growth. EOH CEO Asher Bohbot notes that all its...
Businesses struggling to grasp the amended Broad-Based Black Economic Empowerment (BBBEE) Codes of Good Practice can now use The Practical Guide to Amended B-BBEE Codes of Good Practice to help them understand the new regulations.
South African missiles, unmanned air vehicles, systems integration and space company Denel Dynamics, part of the State-owned Denel defence industrial group, is most optimistic about its prospects. “The future is looking very exciting,” enthuses Denel Dynamics CEO...
Article contains comments
More
 
 
Latest News
Updated 14 minutes ago Eni on Thursday laid out plans to sell assets, including a multi-billion dollar stake in oil service firm Saipem, and downsize its ailing refinery business to help fund its transformation into a leaner oil and gas outfit. In a strategy update, new Chief Executive...
Updated 34 minutes ago Human Settlements Minister Lindiwe Sisulu was considering the formation of a Women Construction Bank to focus on financing women-led cooperatives and construction companies involved in community infrastructure and human settlements projects. Delivering a keynote...
Updated 58 minutes ago The seasonally adjusted Kagiso Purchasing Managers’ Index (PMI) has contracted for the fourth consecutive month, signalling the manufacturing sector’s continued subpar performance. The index “expectedly” fell from 46.6 in June to 45.9 index points in July,...
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
SINGLE EXPERIMENT An artist’s impression of OCO-2 in orbit
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
RICE TAG The real costs of operating Rea Vaya have become clear
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks