IMF Retains Nigeria’s Growth Forecast for 2022 at 3.4%

By Aduragbemi Omiyale

The Nigerian economy is predicted to grow in 2022 by 3.4 per cent, the International Monetary Fund (IMF) has said in its latest report.

The global lender said on Tuesday that it does not believe anything could trigger a change in Nigeria’s growth forecast for the year at the moment.

The nation’s economy has been in a bad shape as a result of several factors, including insecurity across the country, foreign exchange (FX) scarcity, low earnings from crude oil sales despite a hike in prices in the global market, and a rising inflation due to increase in the prices of food items, among others.

In the report titled Gloomy and More Uncertain, the IMF, however, sliced its growth projections for the global economy to 3.2 per cent, warning that the ongoing invasion of Ukraine by Russia could further spell doom.

“Global output contracted in the second quarter of this year, owing to downturns in China and Russia, while US consumer spending undershot expectations.

“Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide––especially in the United States and major European economies––triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID- 19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine,” a part of the report said.

The lender also stated that, “The risks to the outlook are overwhelmingly tilted to the downside. The war in Ukraine could lead to a sudden stop of European gas imports from Russia; inflation could be harder to bring down than anticipated either if labour markets are tighter than expected or inflation expectations unanchor; tighter global financial conditions could induce debt distress in emerging market and developing economies; renewed COVID-19 outbreaks and lockdowns, as well as a further escalation of the property sector crisis, might further suppress Chinese growth; and geopolitical fragmentation could impede global trade and cooperation.

“A plausible alternative scenario in which risks materialize, inflation rises further, and global growth declines to about 2.6 per cent and 2.0 per cent in 2022 and 2023, respectively, would put growth in the bottom 10 per cent of outcomes since 1970.”