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Africa's Pulse is a biannual publication containing an analysis of the near-term macro-economic outlook for the region. It also includes a section focusing on a topic that represents a particular development challenges for the continent. It is produced by the Office of the Chief Economist for the Africa Region.This issue is an analysis of issues shaping Africa's economic future. Growth remains stable in Sub-Saharan Africa. Some countries are seeing a slowdown, but the region's economic prospects remain broadly favorable. External risks of higher global financial market volatility and lower growth in emerging market economies weigh on the downside. In several Sub-Saharan African countries, large budgetary imbalances are a source of vulnerability to exogenous shocks and underscore the need for rebuilding fiscal buffers in these countries. The Ebola outbreak is exacting a heavy human and economic toll on affected countries and, if not rapidly contained, the risk of wider contagion grows. Without a scale-up of effective interventions, growth would slow markedly not only in the core countries (Guinea, Liberia, and Sierra Leone), but also in the sub region as transportation, cross-border trade, and supply chains are severely disrupted. In Sub-Saharan Africa, growth in agriculture and services is more effective at reducing poverty than growth in industry. Structural transformation has a role to play in accelerating poverty reduction in Sub-Saharan Africa. Increasing agricultural productivity will be critical to fostering structural transformation. Boosting rural income diversification can facilitate this transformation, as well. Investments in rural public goods and services (for example, education, health, rural roads, electricity and ICT), including in small towns, will be conducive to lifting productivity in the rural economy. Although Sub-Saharan Africa's pattern of growth has largely bypassed manufacturing, growing the region's manufacturing base, especially by improving its fundamentals, lower transport cost, cheaper and more reliable power, and a more educated labor force, will benefit all sectors.

Economies --- GDP --- Growth --- Macroeconomic Analysis

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Africa's Pulse is a biannual publication containing an analysis of the near-term macro-economic outlook for the region. It also includes a section focusing on a topic that represents a particular development challenges for the continent. It is produced by the Office of the Chief Economist for the Africa Region.This issue is an analysis of issues shaping Africa's economic future. Growth remains stable in Sub-Saharan Africa. Some countries are seeing a slowdown, but the region's economic prospects remain broadly favorable. External risks of higher global financial market volatility and lower growth in emerging market economies weigh on the downside. In several Sub-Saharan African countries, large budgetary imbalances are a source of vulnerability to exogenous shocks and underscore the need for rebuilding fiscal buffers in these countries. The Ebola outbreak is exacting a heavy human and economic toll on affected countries and, if not rapidly contained, the risk of wider contagion grows. Without a scale-up of effective interventions, growth would slow markedly not only in the core countries (Guinea, Liberia, and Sierra Leone), but also in the sub region as transportation, cross-border trade, and supply chains are severely disrupted. In Sub-Saharan Africa, growth in agriculture and services is more effective at reducing poverty than growth in industry. Structural transformation has a role to play in accelerating poverty reduction in Sub-Saharan Africa. Increasing agricultural productivity will be critical to fostering structural transformation. Boosting rural income diversification can facilitate this transformation, as well. Investments in rural public goods and services (for example, education, health, rural roads, electricity and ICT), including in small towns, will be conducive to lifting productivity in the rural economy. Although Sub-Saharan Africa's pattern of growth has largely bypassed manufacturing, growing the region's manufacturing base, especially by improving its fundamentals, lower transport cost, cheaper and more reliable power, and a more educated labor force, will benefit all sectors.

Economies --- GDP --- Growth --- Macroeconomic analysis

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The People's Republic of China (PRC) has experienced stellar economic performance over the last 3 decades. Gross domestic product growth has averaged 10% per year. Per capita income has increased by a factor of 13. Life expectancy at birth increased from 67 to 73 years. Rapid growth, however, has posed eight challenges for the PRC: industrial transformation, balanced rural-urban development, human resource transformation, environmental protection, climate change mitigation, water security, subnational debt management, and further integration with the international economic system. In 2013, the Asian Development Bank helped the PRC prepare the 13th Five-Year Plan 2016-2020. This report summarizes key issues and recommends practical policy options to address the PRC's challenges.

Gross domestic product --- Domestic product, Gross --- GDP --- Gross national product --- China --- Economic conditions.

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This paper applies a growth diagnostics approach to identify the most binding constraints to private-sector growth in Malawi - a small, landlocked country in Southern Africa with one of the lowest per capita incomes in the world. The approach aims to identify the constraints (in terms of public policy, implementation, and investments) most binding on marginal investment, and therefore whose relaxation would have the largest impact on growth through the investment channel. The authors find that growth in Malawi has been primarily driven by the domestic multiplier effect from export revenues. The multiplier effect is particularly pronounced due to the high number of smallholder farmers, which produce Malawi's main export crop, tobacco, and consequently results in the widespread and rapid transmission of agricultural export income. Furthermore, despite changes in the structure of agricultural production from estate to smallholder farming and liberalization of prices and finance, a longstanding relationship persists between exports in real domestic currency and overall gross domestic product. This central role of exports in creating domestic demand highlights the importance of the real exchange rate in Malawi's growth story, which directly increases the strength of the export multiplier. The most pressing constraint to growth in Malawi continues to be the regime of exchange rate management. Despite good progress, there is compelling evidence that the rate is still substantially overvalued. Furthermore, it is also likely that the inflow of foreign aid - in excess of 50 percent of exports -contributes to the overvaluation through its large component of recurrent expenditures.

Access to Finance --- Agriculture --- Currencies and Exchange Rates --- Debt --- Debt Markets --- Economic Theory and Research --- Emerging Markets --- Export growth --- Exports --- Finance and Financial Sector Development --- GDP --- GDP deflator --- GDP per capita --- Gross domestic product --- Human capital --- Income --- Inflation --- Interest rates --- Living standards --- Monopoly --- Multiplier effect --- Overvaluation --- Per capita incomes --- Private Sector Development --- Real GDP --- Total factor productivity --- Treasury bills

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Do poor countries grow faster than rich countries? In other words, does the gap of GDP per capita among countries decrease over time?
The purpose of this study is 1) to describe the empirical tools available to investigate the international convergence of product per capita, 2) to expose by a literature review the different findings on the subject, 3) to assess the pros and cons of the different empirical methods, 4) to investigate, by a meta-regression, the reasons of the multiple different findings in term of β-convergence, 5) to estimate the ‘true’ β-convergence speed.
Beta, sigma, gamma, total factor productivity, unit root, Markov chains, non-parametric analysis among others, these are possible methods to investigate the concept of international convergence of GDP per capita. The literature review shows that these different methods lead to different findings. Moreover, a single method applied by different authors can result in different findings. In front of this multitude of results, we are going to focus on the β-convergence.
Within the framework of a meta-regression realized with 116 different estimations of speed of β-convergence from 14 different authors, we found what was the cause of the differences in the findings. The statistical estimator used shows a great influence on the result: the use of an OLS estimator results in very small speed of convergence compared to a fixed-effect or a GMM estimator. The source of the data and the homogeneity of the countries included in each study also have a relevant impact on the result. In terms of conditional convergence, the choice of the conditioning variables is crucial since each of them influences differently the results. The time period under study has obviously an impact on the resulting speed of convergence.
The empirical results show that from an international point of view, there has been a conditional β-convergence of GDP per capita during the period 1960-2016. On the other-hand, the results do not provide any evidence for international absolute convergence. Therefore, the gap of GDP per capita between poor and rich countries is not vanishing.

beta --- convergence --- growth --- conditional --- meta-regression --- GDP per capita --- Sciences économiques & de gestion > Economie internationale