IMF lowers Africa's 2009 growth forecast, sees recovery

By Lucia Mutikani

WASHINGTON (Reuters) - Growth in Africa will slow a bit more than initially thought this year as the continent battles a collapse in exports and tight global financial conditions, the International Monetary Fund said.

In its latest World Economic Outlook released on Wednesday, the IMF projected gross domestic product (GDP) growth in the resource-rich continent slowing to 1.7 percent from the 1.8 percent it estimated in July. It grew 5.2 percent in 2008.

The IMF also lowered 2009 growth forecasts for sub-Saharan Africa to 1.3 percent from the 1.5 percent it predicted three months ago. The sub-continent grew 5.5 percent last year.

"Growth in Africa has slowed significantly as a result of the collapse of global trade and disruptions in global financial markets, but growth is expected to regain momentum as the global recovery gets under way," the IMF said.

Economic powerhouse South Africa was seen bearing the brunt of the collapse in global trade and disruptions in global financial markets, with the economy forecast to shrink 2.2 percent this year. The South African economy is in the throes of its first recession in 17 years.

The economy of diamond producer Botswana has been one of the hardest hit by the global recession, according to the IMF, and the oil exporting nations of Angola, Nigeria and Equatorial Guinea are expected to suffer the sharpest slowdowns in 2009.

The fund projected that growth in Africa will pick up to 4.0 percent in 2010, a touch below estimates for a 4.1 percent expansion three months ago. Growth for the sub-continent was seen at 4.1 percent next year, unchanged from July's forecasts.

"The outlook for the region is subject to significant uncertainty. A weaker-than-expected recovery of the global economy would slow the recovery in commodity markets and worsen the prospects for inflows, including remittances and foreign direct investment," the IMF said.