In Africa, inflation has been a persistent problem, leading to high costs of living, reduced investments, and slow economic growth. However, several African countries have been projected to have the lowest inflation rates, indicating a stable economic environment and potential for growth. In this article, we will explore the top 10 African countries with the lowest inflation rates that present potential opportunities for businesses and investors even in the face of the inflation rate on the continent.
Africa is rich in human capital and natural resources, resulting in a market that is appealing to foreign investors worldwide.
As a result, inflation levels on the continent, barring complex domestic and foreign economic challenges, have been moderate at worse in recent years.
Unfortunately, there wasn’t a shortage of these financial complications last year, resulting in high inflation rates across many African countries.
Experts’ opinion about the lowest inflation rates in Africa
According to an African Continental Free Trade Area report, average consumer price inflation across the continent is expected to rise by 0.9% to 13.8% in 2022, up from 12.9% in 2021, reaching levels not seen in more than a decade.
In 19 African countries, inflation rates reached double digits, with East Africa having the highest rate at 25.3%, West Africa at 16.8%, and Southern Africa at 13.2%.
However, in Northern and Central Africa, inflation rates remained in the single digits, at 8.1% and 7.3%, respectively.
AfCFTA proposed that bold policy actions be implemented through monetary, fiscal, and structural policies to address this issue.
Furthermore, the organisation stated that African countries must increase regional trade to increase resilience to the global economic slowdown and reduce persistent trade deficits.
These recommendations will undoubtedly lower Africa’s inflation rate and boost economic activity within the continent’s borders.
African countries forecasted to have the lowest inflation rates in 2023
AfCFTA was able to estimate the projected inflation rates for each African country in 2023 by analysing data sets from the African Development Bank statistics, the International Monetary Fund’s World Economic Outlook, October 2022, and United Nations Population Division estimate.
The first report contains data subject to change if an unexpected economic event, such as a pandemic, rears its ugly head.
Aside from that, this expected bi-annual report would be revised at the year’s midpoint. However, as of now, the organisation has computed its inflation figures, and the ten African countries with the lowest forecasted inflation figures are listed below.
|Rank||Country||Inflation rate 2022||Inflation forecast 2023|
Note: The data for 2022 inflation rates comes from TradingEconomics, a data platform that offers users accurate information for 196 countries, including historical records and projections for more than 20 million economic metrics, exchange rates, stock market indexes, government bond yields, and commodity prices.
TradingEconomics last updated inflation rates for Mali, Chad, and Morocco in November, while Gabon and Cameroon were updated in October and September, respectively.
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