IMF revises Nigeria GDP growth on weaker growth

The International Monetary Fund has revised Nigeria’s economic growth downward by 0.2 percentage point, mainly due to weaker-than-expected growth.

The IMF now expects Nigeria’s economy in 2024 to grow by 3.1 per cent. From the 3.3 per cent it earlier projected in April.

In its recent update to the global economic outlook titled “Global Economy in a Sticky Spot” published on Tuesday, the organisation said the downgrade followed the country’s weak activities from January to March 2024.

It also lowered the economic growth projections for Sub-Saharan Africa (SSA) due to a decrease in Nigeria’s economic activities, from 3.8 per cent to 3.7 per cent.

“The forecast for growth in sub-Saharan Africa is revised downward, mainly as a result of a 0.2 percentage point downward revision to the growth outlook in Nigeria amid weaker-than-expected activity in the first quarter of this year,” the IMF said.

It, however, retained its 3.0 per cent forecast for Nigeria’s economic growth in 2025.

Globally, the IMF projected a steady growth at 3.2 per cent in 2024 and 3.3 per cent in 2025, consistent with its earlier forecast in April this year.

“However, varied momentum in activity at the turn of the year has somewhat narrowed the output divergence across economies as cyclical factors wane and activity becomes better aligned with its potential.

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“Services price inflation is holding up progress on disinflation, which is complicating monetary policy normalisation. Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty. The policy mix should thus be sequenced carefully to achieve price stability and replenish diminished buffers,” it said.

The National Bureau of Statistics (NBS) in its recent report showed that Nigeria’s Gross Domestic Product (GDP) dropped to 2.9 per cent, from 3.46 per cent recorded in the fourth quarter of 2023.