IMF expects 5% median inflation in sub-Saharan Africa in 2027 — TimesLIVE

TimesLIVE reports that the International Monetary Fund has worsened its inflation forecast for sub-Saharan African countries, although expectations for the region’s economic growth rate have improved. The IMF warned that the region’s economic resilience remains vulnerable due to inflationary pressures, high borrowing costs and climate risks.

Growth and inflation forecast

The fund raised its forecast for the region’s economic growth in 2026 to 4.5%, up from the 4.3% it expected in April. This was attributed to adjustments in global supply chains and domestic reforms.

At the same time, according to IMF estimates, median inflation will rise from 3.4% in 2025 to 4.3% in 2026 and to 5% in 2027. In its April forecast, the fund expected inflation to reach 5% as early as 2026 and then begin to decline. The IMF noted that most countries may need to tighten monetary policy to bring inflation back to target levels.

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Debt, aid and climate risk

Interest payments already absorb about 12% of government revenues in the region’s countries. Yields on 10-year US government bonds rose from 4% at the end of February to 5.2% at the end of September, increasing borrowing costs despite narrowing sovereign spreads.

The IMF also drew attention to delays in debt restructuring. Ethiopia, Ghana and Zambia have made progress in these processes, but they took years. IMF African Department Director Zane Zeidane said that new approaches and template memorandums should speed up future restructurings.

Additional risks include the gap between commodity exporters and importers, further reductions in bilateral aid and the El Niño phenomenon. According to IMF modelling, a climate shock could reduce the region’s growth by 0.5 percentage points and raise inflation by 2.6 percentage points in 2027.