IMF tells Africa Government to moderate Expansionary Fiscal Policy.

     Government will only enable the expansionary fiscal policy when the country itself is going through recession or when government spending is more than tax revenue and when everything related to the economy is growing slowly. This policy stimulates the economic growth rapidly by decreasing the tax and increasing government expenditure. Based on the following article, the director of the International Monetary Fund has advised the Africa Government to focus more on to enabling the expansionary fiscal policy as some of the Sub- Sahara African countries have a very low economic growth. According to the IMF, they forecast the gross domestic product (GDP) in 2011 for the region was 5.5% which is 0.4% lower than the previous year. Therefore, expansionary fiscal policy needs to be moderate in order to make sure that the public finance and the public debt level can be manageable and maintained at a certain average point. In the span of 4 years from 2004 to 2008, the economic growth of the Sub- Sahara African countries most of their economics has being growing from the rate 6.0 to 6.5%. Although the rate is low but this shows a positive sign to the countries as the economic are starting to stabilize. 

                                                                                         

 Source:

http://www.reuters.com/article/2010/10/25/africa-economy-idUSLDE69O1CB20101025

                                                                                    Entry by: Jonathan Kok