World Bank upgrades Sub-Saharan Africa growth forecast over inflation drop

Sub-Saharan African economies are expected to grow by a faster 3.8% this year due to receding price inflation, the World Bank said on Tuesday. 

Back in April, the institution had forecast an initial 3.5% growth for the region in 2025. 

In its biannual Africa's Pulse report, the bank said this upgrade was due to lower inflation and improved foreign trade. The region's median inflation rate declined to 4.5% in 2024 and should stabilise between 3.9 and 4% annually by 2026, the bank predicted.

Growth in Sub-Saharan Africa is also expected to accelerate to reach an annual average of 4.4% in the next two years. 

This improvement is driven by growth forecasts upgrades for major regional economies like Ivory Coast, Ethiopia and Nigeria.  

But the World Bank remains concerned with trade uncertainty due to high debt burdens, a lack of jobs, and the policies of United States president Donald Trump. 

"Trade challenges remain very high. We don't know how this is going to be resolved because there are lots of negotiations going on," said Andrew Dabalen, chief economist for Africa at the World Bank. He cited the recent expiry of the African Growth and Opportunity Act (AGOA), a key trade agreement between the United States and African nations.

The bank urged the region’s economies to create more jobs and ensure that they offer “better pay, stability, and opportunities” for their populations.