Reduction of Fed incentive programs influences the economy
The global financial situation, decline in commodity prices and political unrest may affect the prospects for economic growth in Africa, according to the World Bank.
The report on global economic prospects stating that Africa's economy will also be affected with the Fed's decision to reduce the purchase of shares of the various organizations that will lead to higher fixed interest rates and spreads.
Southern Africa is closely connected to the global financial markets and subject to the influence of sudden fluctuations in the markets. Thus, they may be affected by the suspension of investment.
Southern Africa depends heavily on investments in securities that help compensate for the deficit of budget, which increased to 6.8% in the third quarter of 2013.
Fed monetary incentives Program since 2009 supported currencies of developing countries, such as the South African rand. However, in 2013 due to the future reduction in the Fed's incentive programs, the currency of South Africa has fallen by 19% against the dollar.
After a prolonged drop in commodity prices due to the increase in production and lower demand the economic growth may slow down in countries, which focused on oil, such as Angola and Gabon.
The World Bank has revised forecasts of economic growth in the region in 2013. According to preliminary data, the rate drops to 4.7 % from 4.9 %. It is expected