of the regions hardest hit ; its economy has gone back into recession this year, its banking system is very fragile and countries on the periphery of the eurozone have unsustainable levels of public debt. the slower economic growth has also affected world trade. in the five years prior to the start of the economic crisis, world trade volumes expanded at an average of 8 percent per annum, but this growth fell to only 3 percent per annum in the last five years. the slowdown in the growth of world trade is one of the main channels through which the economic problems of advanced economies are transmitted to developing economies. the short term prognosis for the global economy is not propitious. the october 2012 edition of the world economic outlook, published by the international monetary fund ( imf ), forecasts only a very modest recovery in global economic growth in 2013, to 3. 6 percent compared to 3. 3 percent in 2012. the imf warns that the outlook is very uncertain and that bis central bankers ’ speeches the risks for a serious global slowdown are alarmingly high. the continued difficulties facing the advanced economies are not especially surprising, given that the economic crisis had its genesis in a systemic financial crisis. historically, major financial crises have had large and long lasting negative effects on economic growth. the medium to long term prospects for the global economy are also very uncertain. a report released last week by the conference board, one of the leading economic forecasters in the united states, forecasts that economic growth in both advanced and developing economies will be weak through to the middle of the 2020s. the conference board forecasts global growth of only 3 percent per annum during 2013 – 2018 and then only 2. 5 percent per annum during 2019 – 2025. 2. what are the implications of the global economic crisis for african economies? the health of the global economy matters profoundly for african economies, especially because of its impact on their balance of payments. the weaknesses in the global economy and especially the slowdown in the growth of world trade have constrained africa ’ s export growth while inflows of donor grants have stagnated and private capital flows have become more volatile. the current account balances of sub - saharan african ( ssa ) economies have worsened markedly since the onset of the global crisis, from an average surplus of 0. 7 percent of gdp during 2004 – 08 to a projected average deficit of 3. 3 percent of gdp during 2012 – 13. 1 the deterioration of the current account affects

emmanuel tumusiime - mutebile : the eurozone crisis and its impact on africa ’ s economy presentation by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the comesa ( common market for eastern and southern africa ) policy organisation meeting, kampala, 20 november 2012. * 1. * * introduction the eurozone crisis is part of a much broader economic and financial crisis that has afflicted the global economy since 2008. the global crisis is manifested primarily in slow economic growth and the fragility of financial systems. global economic growth has fallen by about two percentage points in the five years since the crisis began in 2008 compared to the preceding five years ( table 1 ). the need to reduce very high levels of debt in both the public and private sectors has impeded economy recovery in the advanced economies. table 1 real output growth in the world and growth in world trade ( percent ) 2004 – 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 proj proj world 4. 9 4. 6 5. 3 5. 4 2. 8 – 0. 7 5. 1 3. 8 3. 3 3. 6 advanced economies 3. 1 2. 7 3. 1 2. 8 0. 1 – 3. 7 3. 0 1. 6 1. 3 1. 5 ow euro area 2. 2 1. 7 3. 2 3. 0 0. 4 – 1. 8 2. 0 1. 4 – 0. 4 0. 2 emerging and developing economies 7. 5 7. 3 8. 2 8. 9 6. 0 2. 8 7. 4 6. 2 5. 3 5. 6 sub - saharan africa 7. 1 6. 2 6. 4 7. 1 5. 6 2. 8 5. 3 5. 1 5. 0 5. 7 uganda 6. 5 6. 3 10. 8 8. 4 8. 7 7. 3 5. 9 6. 7 3. 4 5. 0 world trade 11. 2 8. 0 9. 1 3. 0 – 10. 7 12. 6 5. 8 3. 2 4. 5 7. 7 2012 and 2013 are projections uganda data pertains to the fiscal year sources : imf world economic outlook, except for uganda where it is the uganda bureau of statistics although all regions of the world have suffered a slowdown in economic growth as a result of the economic and financial crisis, the eurozone is one