Two global economies might be trading places (kind of).
Driving the news: Sub-Saharan Africa’s GDP is pegged to grow by 4.4% this year per a recent IMF report. The same report projects Asian GDP growth to slow to 4.1%, setting the stage for Africa’s economy to grow faster than Asia’s for the first time in modern history.
The IMF also predicts that 11 of the 15 fastest-growing economies in 2026 will be African. The highest-ranked African nation is South Sudan, with projected GDP growth of 22.4%.
Why it’s happening: African economic growth isn’t going to set the world on fire, but it’s poised to achieve some consistent gains thanks to a weakened U.S. dollar, which makes it easier to service dollar-denominated debt, and booming commodity prices (chiefly gold and copper).
Africa is estimated to have as much as 40% of the world’s gold; a newly proposed Pan-African Gold Bank looks to keep control over the resource within the continent.
Meanwhile, Asia has become richer, which usually comes with slower growth. Its main economic driver, China, has been growing more slowly even as it continues to catch up to the world’s wealthiest nations.
Why it matters: Whether or not it surpasses Asia’s GDP growth this year, Sub-Saharan Africa is primed to have a larger impact on the global economy going forward. By 2050, one in four people will be African, a larger share than China and India combined. With such an outsized share of the global workforce, Africa’s GDP will become the world’s business.—QH