• IMF upgrades 2026 regional growth forecast to 4.5% from 4.3% in April
  • Interest payments consume about 12% of government revenue across region, IMF says
  • Median inflation now seen rising to 5.0% in 2027 from 3.4% in 2025

Sub-Saharan Africa’s inflation outlook ⁠has ⁠worsened since April even as growth ⁠held up better than expected, the IMF said, warning that the region’s hard-won ​economic gains remain fragile.

The fund upgraded its 2026 growth forecast for the region to 4.5% from 4.3% back in ‌April, citing global supply adjustments and ‌domestic reforms. But that resilience is masking a worsening inflation picture, as 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, when the IMF expected price pressures to peak at 5.0% in 2026 before easing.

“Monetary policy has to remain data dependent, but the focus should be on making sure that you bring inflation to your target,” Zeine Zeidane, director ​of the IMF’s African Department, told Reuters.

The fund’s regional view, updated this week, said monetary tightening “may ⁠be ⁠needed” for most countries, a ⁠firmer warning than ​April’s reference to a “difficult balancing act.”

Interest payments now consume about 12% of government revenue across the region, ​and the US 10-year Treasury ⁠yield has climbed from 4% in late February to 5.2% by end-September, pushing up borrowing costs even as sovereign spreads have narrowed.

“Despite compressing the spread, the cost of borrowing could continue to rise,” Zeidane said.

Debt-restructuring delays can slow countries’ access to IMF financing, deepen debt distress and make economic adjustment harder, the Fund has warned. Ethiopia, Ghana ⁠and Zambia have made progress restructuring their debts, but the processes took years.

Zeidane said a new ⁠restructuring playbook and template memoranda of understanding should speed future cases, while the IMF is also offering its “good offices” to improve information-sharing between creditors and debtors.

A widening gap between commodity exporters and importers adds to the strain. Oil exporters’ current-account surpluses are jumping to 4.4% of GDP from 1.6%, while non-resource-intensive economies see deficits widen to 5.8% from 3.4% — a sharper divergence than flagged in April. Bilateral aid is projected to fall a further 12% in 2026 after dropping roughly a quarter in 2025.

El Niño, not a major feature of the Fund’s April outlook, now ⁠looms as a key risk. The climate shock event, which could disrupt agriculture and amplify food-security risks, could cut growth by half a percentage point and lift inflation by 2.6 percentage points in 2027, IMF simulations showed. “Things could get worse than what we have in the outlook,” Zeidane said, adding ​the fund “stands ready” with emergency financing across its 18 active country programs.