Key facts
- IMF upgrades 2026 regional growth forecast to 4.5% from 4.3%.
- Median inflation projected to reach 5.0% in 2027, a reversal from earlier forecasts.
- Interest payments consume 12% of government revenue across the region.
- Bilateral aid projected to fall 12% in 2026.
- El Niño could cut growth by 0.5 percentage points and lift inflation by 2.6 percentage points in 2027.
Sub-Saharan Africa's inflation outlook has worsened since April, even as economic growth has held up better than expected, the International Monetary Fund said on October 15, 2026. The fund upgraded its 2026 growth forecast for the region to 4.5% from 4.3%, citing global supply adjustments and domestic reforms. However, median inflation is now projected to climb from 3.4% in 2025 to 4.3% in 2026 and 5.0% in 2027, a reversal from April projections. Zeine Zeidane, director of the IMF's African Department, told Reuters that monetary policy must remain data-dependent, with a focus on bringing inflation to target. The IMF warned that monetary tightening may be needed for most countries, a firmer stance than previously indicated. Interest payments now consume about 12% of government revenue across the region, and rising US Treasury yields are pushing up borrowing costs. Delays in debt restructuring can worsen debt distress, although Ethiopia, Ghana, and Zambia have made progress. A widening gap between commodity exporters and importers adds strain, with oil exporters seeing larger current-account surpluses while non-resource-intensive economies face widening deficits. Bilateral aid is also projected to fall further in 2026. The IMF simulations indicated that the El Niño climate shock could cut growth by half a percentage point and lift inflation by 2.6 percentage points in 2027.