IMF Retains 3.2% GDP Growth Forecast for Nigeria Amid Shaky Global Recovery
By Adedapo Adesanya
The International Monetary Fund has said Nigeria’s economy would grow by 3.2 per cent in 2023 in its recent world economic outlook update, retaining its forecast from January.
In the World Economic Outlook: A Rocky Recovery (2023 Apr), the IMF raised the country’s 2024 economic growth projection to 3.0 per cent from 2.9 per cent in its January update.
According to the Washington-based lender, global economic growth is expected to fall from 3.4 per cent in 2022 to 2.8 per cent in 2023.
It said, “The baseline forecast is for growth to fall from 3.4 per cent in 2022 to 2.8 per cent in 2023 before settling at 3.0 per cent in 2024.”
Recall that the World Bank, in its recent African Pulse report, expects Nigeria’s economy to grow by 2.8 per cent amid weakening performances in non-oil activity as well as a slow uptick in the country’s oil production while rising inflation and a weak Naira persist.
The IMF report noted that the global economy appears poised for a gradual recovery from the powerful blows of the pandemic and of Russia’s unprovoked war on Ukraine. China is rebounding strongly following the reopening of its economy just as supply-chain disruptions are unwinding, while the dislocations to energy and food markets caused by the war are receding.
The lender noted that the tightening of monetary policy by most central banks should start to bear fruit, with inflation moving back toward its targets.
“In our latest forecast, global growth will bottom out at 2.8 per cent this year before rising modestly to 3.0 per cent in 2024,” it noted.
The report showed that global inflation will decrease, although more slowly than initially anticipated, from 8.7 per cent in 2022 to 7.0 per cent this year and 4.9 per cent in 2024.
Notably, emerging markets and developing economies are already powering ahead in many cases, with growth rates (fourth quarter over fourth quarter) jumping from 2.8 per cent in 2022 to 4.5 per cent this year.
“The slowdown is concentrated in advanced economies, especially the Euro area and the United Kingdom, where growth (also fourth quarter over fourth quarter) is expected to fall to 0.7 per cent and –0.4 per cent, respectively, this year before rebounding to 1.8 and 2.0 per cent in 2024.”
IMF, however, warned that the recent banking crisis in the US painted a picture that anything could happen in the global economy.
“Below the surface, however, turbulence is building, and the situation is quite fragile, as the recent bout of banking instability reminded us. Inflation is much stickier than anticipated, even a few months ago.
“While global inflation has declined, that reflects mostly the sharp reversal in energy and food prices. But core inflation, excluding the volatile energy and food components, has not yet peaked in many countries.
“It is expected to decline to 5.1 per cent this year (fourth quarter over fourth quarter), a sizable upward revision of 0.6 percentage point from our January update, well above target,” the report seen by Business Post showed.