IMF Retains 2.9% GDP Growth Forecast for Nigeria in 2024, 3.2% in 2025

By Adedapo Adesanya

The International Monetary Fund (IMF) has predicted that growth in Nigeria will remain unchanged at 2.9 per cent this year and 3.2 per cent in 2025 due to weaker-than-expected activity in the first half of the year.

This is as the wider Sub-Saharan Africa (SSA), which includes Nigeria, will remain unchanged at 3.6 per cent this year, rising to 4.2 per cent in 2025 as weather shocks abate and supply constraints ease.

In its new World Economic Outlook (WEO) report, the Bretton Wood institution also estimates that global growth is expected to ease slightly to 3.2 per cent this year and remain at that level in 2025.

The report noted that global inflation will continue to ease, hitting 5.8 per cent this year, before falling further to 4.3 per cent in 2025.

The report finds that the United States has remained an engine of global growth — in sharp contrast with the euro area, where expansion remains slow.

The world’s largest economy is now expected to grow by 2.8 per cent this year, down ever-so-slightly from the 2.9 per cent seen in 2023, but still a shade better than the Fund’s previous estimate in July.

It is then expected to ease somewhat to 2.2 per cent in 2025 — up 0.3 percentage points from July — as fiscal policy is “gradually tightened and a cooling labour market slows consumption,” the IMF said.

In Europe, growth is still trending higher but remains low by historical standards, and is on track to be at 0.8 per cent this year, rising slightly to 1.2 per cent in 2025.

While France and Spain saw upgrades in their outlook for 2024, the IMF cut its projections for German growth by 0.2 percentage points this year, and by half a percentage point next year, citing its “persistent weakness in manufacturing.”

In the United Kingdom, the IMF says growth is projected to accelerate in both 2024 and 2025, “as falling inflation and interest rates stimulate domestic demand.”

Growth in Japan is expected to slow sharply to just 0.3 per cent this year, before accelerating to 1.1 per cent next year boosted by private consumption as real wage growth strengthens, according to the IMF.

The lender expects the growth in economic output in China to continue to cool, easing from 5.2 per cent last year to 4.8 per cent this year, and then falling further to 4.5 per cent in 2025.

“Despite persisting weakness in the real estate sector and low consumer confidence, growth is projected to have slowed only marginally,” the IMF said, pointing to better-than-expected net exports from the world’s second-largest economy.

The slowdown in India was put at a growth of 7.0 per cent this year, down from 8.2 per cent in 2023.

The IMF expects growth in the Middle East and Central Asia to pick up slightly to 2.4 per cent this year, before jumping to 3.9 per cent in 2025 as the temporary effect of oil and shipping disruptions fade.