The ongoing economic recovery in SSA will remain fragile as the effects of the pandemic linger. As currently the least vaccinated region globally, SSA remains exposed to new waves of the pandemic that could prompt a tightening of restrictions. Apart from oil exporters, public finances will generally continue to deteriorate due to persisting large fiscal deficits, which will continue to constrain fiscal space and amplify affordability challenges.
Fiscal positions will also remain pressured by increased social demands in the years to come as preexisting social pressure related inequality and poverty were amplified by the pandemic. Underlying debt sustainability challenges remain broadly unchanged in 2022 and in particular the need to secure new external funding.
The international community external financial support, through various initiatives, has been essential for many SSA countries. Participation to the Common Framework will potentially increase without another form of direct support which would have negative rating implications if it involves losses on private creditors.
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