Figure 1.31: GDP Growth Forecasts for East and Southern Africa

level recorded since the publication of the Quarterly Labor Force Survey. In addition, rising debt levels are weighing on the government’s capacity to address social issues without jeopardizing the sustainability of its public finances. Addressing electricity shortfalls, corruption in the ruling party, and pressing needs for reform in the labor and product markets remain priorities to push potential growth.

After five consecutive years of recession, economic activity in Angola is projected to rebound from -5.4 percent in 2020 to 0.4 percent in 2021, before accelerating further to 3.1 percent in 2022 on the back of higher oil prices. The adoption of a fiscal consolidation strategy sets the stage for a reduction in nonessential expenditure. The central government is expected to run sizable primary fiscal surpluses for 2021–23, which will help reduce public debt-to-GDP levels—although this outlook remains vulnerable to oil price risks. Monetary tightening and a more stable exchange rate are expected to continue the disinflationary process. Improved supply conditions through structural reforms can also ease price pressures over the medium to long term.

Excluding Angola and South Africa, the subregion is expected to grow by 3.1 percent in 2021 and 4.3 percent in 2022. In Zambia, the economy is projected to grow at 2.2 percent in 2021— up from -3 percent in 2020. The growth rate will accelerate further to 2.9 percent in 2022. An increase in metal prices, particularly copper, will support the recovery; however, downside risks remain due to the slower growth of China amid rising cases of infection caused by the Delta variant. The positive sentiment about Zambia’s new leadership will attract more foreign direct investment and put the country toward an accelerated growth path. Fiscal constraints, reliance on rainfed irrigation, and climate change could alter long-term growth prospects.

Non-resource-rich countries in East and Southern Africa are projected to grow at 3.0 percent in 2021—with growth accelerating to 4.3 percent in 2022 thanks to an increase in tourism. Mauritius and the Seychelles are projected to see rapid growth of 5.1 and 6.9 percent in 2021, respectively. This is expected to be followed by rates of 6.6 and 7.7 percent in 2022, respectively. The better performance of these countries reflects a successful vaccination rollout and the subsequent reopening of borders to inoculated visitors. In Rwanda, the economy is expected to bounce back from -3.4 percent in 2020 to 4.9 percent in 2021 and 6.4 percent in 2022. The strong rebound reflects higher consumption and trade before the outbreak of the Delta variant. Trade

FIGURE 1.31: GDP Growth Forecasts for East and Southern Africa

Percent 6 5 4 3 2 1 0 -1 -2 -3 -4

2019 2020e

East and Southern Africa Non-resource-rich countries in AFE East African Community 2021f

2022f AFE Mineral and metal exporters excl. South Africa East and Southern Africa, excl. South Africa

Source: World Bank staff projections. Note: AFE = East and Southern Africa. The recovery varies across the region and across countries, depending on characteristics and policy constraints.