IMF Lowers Nigeria’s Economic Growth Projection To 3%

The International Monetary Fund (IMF) has revised Nigeria’s economic growth projections for 2024 downwards to 3.0 per cent from the 3.1 per cent forecasted in October.

This adjustment was revealed in its ‘World Economic Outlook Update, January 2024,’ published on Tuesday. As for sub-Saharan Africa, the IMF anticipates economic growth to reach 3.8 per cent in 2024.

It said, “In sub-Saharan Africa, growth is projected to rise from an estimated 3.3 per cent in 2023 to 3.8 per cent in 2024 and 4.1 per cent in 2025, as the negative effects of earlier weather shocks subside, and supply issues gradually improve.

“The downward revision for 2024 of 0.2 percentage point from October 2023 mainly reflects a weaker projection for South Africa on account of increasing logistical constraints, including those in the transportation sector, on economic activity.”

The overall global economic growth is projected to reach 3.1 per cent in 2024 and 3.2 per cent in 2025. The forecast for 2024 is 0.2 percentage points higher than what the Washington-based lender projected in its October 2023 World Economic Outlook.

This anticipated growth is attributed to the expected resilience in the United States and several large emerging markets and developing economies, along with fiscal support in China.

It added, “The forecast for 2024–25 is, however, below the historical (2000–19) average of 3.8 per cent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth. Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy.”

In October 2023, the IMF revised Nigeria’s economic growth downward by 0.3 percentage points to 2.9 per cent for 2023 due to weaker oil and gas production.

This information was disclosed in the IMF’s new World Economic Outlook for October, themed ‘Navigating Global Divergences.’

Previously, in July, the lender had projected Nigeria’s economy to grow by 3.2 per cent in 2023. However, it predicted that growth in the country would be affected by security issues in the oil sector.