Economic Survey 2005

The Global economic recovery sustained the momentum that started in 2002, with real GDP growth estimated at around 5.0 per cent in 2004, the highest growth recorded in the last two decades. Strong growths were experienced in industrialized countries particularly USA and Japan, while an exceptionally rapid expansion was notable in emerging economies, particularly China. This growth was achieved against a backdrop of improved macroeconomic stability, expansion in world trade, higher demand for commodities at improved prices, easing of external debt burdens through the Heavily Indebted Poor Countries (HIPC) initiative and slightly better access to industrial markets. The recovery was somehow well spread across the world but some countries expanded less rapidly than others due to geopolitical risks, high oil prices and unstable financial markets. Real GDP growth rate for the sub-Saharan Africa was estimated at 4.6 per cent in 2004. Virtually all the countries achieved real GDP growths of over 2.0 per cent in 2004 except Zimbabwe which contracted by 5.2 per cent. Political instability and conflicts in some parts of the continent notably the Western Sudan and Zimbabwe, have negatively impacted on the continent’s growth. The real GDP Growth for the sub-Saharan region is projected at 5.8 per cent and inflation is expected to ease to 9.6 per cent.