African economy at risk over Greek exit from EMU – StanChart

By Laz IBEABUCHI

Greek exit from European Monetary Union, EMU, could spell doom for Africa’s economy if the exit leads to a more pronounced recession in the euro zone, says a report by Standard Chartered Group.

Though the continent’s GDP growth is likely to remain positive on average, the report said the risk is due to the fact that Africa’s growth is correlated with Europe’s, adding that the impact would depend on how the contagion is contained.

Assessing the effects of a Greek exit from the European Monetary Union (EMU) on its footprint markets of Asia, Africa and the Middle East, the report said if contagion is contained by European Central Bank’s (ECB) liquidity injections, any negative impact on emerging-market (EM) growth is likely to be limited and temporary.

“We also expect EM central banks and governments to take the necessary action to stimulate their economies. If the European authorities fail to contain the fallout from Greece’s exit

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