By Adedapo Adesanya
Nigeria’s gross domestic product (GDP) is expected to grow by 3.1 per cent in 2024, according to the projections from the United Nations World Economic Situation and Prospects (WESP) report for 2024.
According to the report seen by Business Post, the moderate improvement in the country’s growth prospects for 2024 will be spurred by policy reforms of the Nigerian government in 2023, especially in the hydrocarbon sector.
The report warned that Nigeria’s ballooning public debt, persistent inflation, and rising cost of living, together with a weak business environment would pose a downward risk to growth prospects.
“Efforts to increase in-country oil refining capacity would likely reduce domestic fuel costs in 2024 and beyond,” the UN said.
The flagship forecast launched in New York on Thursday indicates that 2023 stronger-than-expected GDP growth coming out of the COVID-19 pandemic masked short-term risks and structural vulnerabilities in the world economy.
Globally, the UN expects a slowdown in global growth from an estimated 2.7 per cent in 2023 to 2.4 per cent in 2024.
The short-term outlook is based on persistently high-interest rates, further escalation of conflicts, sluggish international trade, and increasing climate disasters, which all pose significant challenges to global growth.
It points to a prolonged period of tighter credit conditions and higher borrowing costs, presenting strong headwinds for a world economy saddled with debt and in need of more investments to resuscitate growth, fight climate change, and accelerate progress toward the Sustainable Development Goals (SDGs).
According to the report, global inflation is projected to decline further, from an estimated 5.7 per cent in 2023 to 3.9 per cent in 2024.
It noted that price pressures are still elevated in many countries and any further escalation of geopolitical conflict will add to that.
In about a quarter of all developing countries, annual inflation is projected to exceed 10 per cent in 2024, the report highlights.
Since January 2021, consumer prices in developing economies have increased by a cumulative 21.1 per cent, significantly eroding the economic gains made following the COVID-19 recovery.
Consumer spending, a key driver of its economy, is likely to weaken due to various factors, including high interest rates and a softening labour market, the report says.
The United States, the world’s largest economy, is expected to see a drop in GDP growth from 2.5 per cent in 2023 to 1.4 per cent in 2024 and China, facing domestic and international headwinds, is projected to experience a moderate slowdown with growth estimated at 4.7 per cent in 2024, down from 5.3 last year.
Europe and Japan also face challenges with growth rates forecasted at 1.2 per cent for both regions in 2024.
In Africa, GDP growth in African economies is forecast to register moderate improvement in 2024, increasing to 3.5 per cent on average.
However, the 2024 WESP report calls for urgent action to address these diverse challenges.
Dipo Olowookere