Africa's growth ticks up as global economy slows

Africa's economic growth is projected to edge up modestly from an estimated 3.9 percent in 2025 to 4.0 percent in 2026 and 4.1 percent in 2027, even as the global economy shows signs of slowing.

Worldwide economic output is forecast to expand by 2.7 percent in 2026, slightly below the 2.8 percent growth estimated for 2025, according to a new report by the United Nations Department of Economic and Social Affairs.

The World Economic Situation and Prospects 2026 report notes that diversification of export partners has provided African economies with some resilience against trade disruptions. However, limited diversification at the product level – such as continued reliance on a narrow range of apparel exports - remains a key vulnerability for several countries.

Divergent commodity price trends continue to drive uneven economic performance across the continent. While inflation has moderated, it remains elevated in many countries, prompting central banks to proceed cautiously with monetary easing. At the same time, limited fiscal space, rising debt-servicing costs, declining official development assistance and persistent trade uncertainty continue to weigh on the region's outlook.

Growth in the world's least developed countries or LDCs is projected to rise to 4.6 percent in 2026 and 5.0 percent in 2027, up from an estimated 3.9 percent in 2025, but still well below the Sustainable Development Goals target of at least 7 percent. Stronger performance in several large LDCs, including Bangladesh, Ethiopia, and Tanzania, is underpinned by improved macroeconomic stability, robust agricultural output, and favorable commodity prices.

However, many smaller LDCs face more challenging outlook, constrained by security concerns, limited fiscal space, and elevated debt burdens. Higher US tariffs and declining official development assistance are further dampening export prospects and development financing.

While tariffs and other protectionist measures have unsettled the international trading environment and heightened uncertainty, the report notes that global integration remains deep. Trade in goods and services still accounts for more than 50 percent of global GDP, and about 72 percent of goods were traded under the World Trade Organization most-favored-nation regime as of September 2025.

The report highlighted artificial intelligence as a potential driver of productivity growth. Although micro-level evidence points to efficiency gains in selected sectors, the report authors cautions that the timing and scale of the impact of AI on overall productivity remain uncertain and will depend on how quickly firms, workers, and institutions adapt.

edithmutethya@chinadaily.com.cn