By Modupe Gbadeyanka
The International Monetary Fund (IMF) has predicted that Nigeria will experience a 0.8 percent growth in its economy in the year 2017.
This affirms the earlier forecast made by the World Bank last week that the country’s Gross Domestic Product (GDP) will grow by 1 percent in the same year under review.
Nigeria was hit with its worst recession in 2016, with inflation rising above 18 percent in the year.
But the latest forecasts by the two leading global financial institutions affirming that Nigeria will get out of recession this year will come as a sigh of relief for Nigerians and especially the government, which has been battling hard to revamp the economy.
In its report released on Monday titled ‘World Economic Outlook (WEO): A Shifting Global Economic Landscape,’ the IMF noted that “Nigeria’s forecasts were also revised up, primarily reflecting higher oil production due to security improvements.”
It predicted that Nigeria GDP will grow by 0.8 percent in 2017 and 2.3 percent in 2018.
The IMF also projected that Nigeria’s economy grew by 1.6 percent in 2016, despite the decline in economic growth recorded from January to September.
However, on the world scene, the IMF said Global growth for 2016 is now estimated at 3.1 percent, in line with the October 2016 forecast.
Economic activity in both advanced economies and EMDEs is forecast to accelerate in 2017–18, with global growth projected to be 3.4 percent and 3.6 percent, respectively, again unchanged from the October forecasts.
Advanced economies are now projected to grow by 1.9 percent in 2017 and 2.0 percent in 2018, 0.1 and 0.2 percentage points more than in the October forecast, respectively.
As noted, this forecast is particularly uncertain in light of potential changes in the policy stance of the United States under the incoming administration.
It said the projection for the United States is the one with the highest likelihood among a wide range of possible scenarios. It assumes a fiscal stimulus that leads growth to rise to 2.3 percent in 2017 and 2.5 percent in 2018, a cumulative increase in GDP of ½ percentage point relative to the October forecast. Growth projections for 2017 have also been revised upward for Germany, Japan, Spain, and the United Kingdom, mostly on account of a stronger-than-expected performance during the latter part of 2016. These upward revisions more than offset the downward revisions to the outlook for Italy and Korea.
It added that the baseline forecast for the global economy points to a pickup in growth over the rest of the forecast horizon from its subdued pace this year, in the context of positive financial market sentiment, especially in advanced economies.
Nonetheless, the potential for disappointments is high, as underscored by repeated growth markdowns in recent years.
