2021: IMF forecasts higher GDP growth for Nigeria at 2.5%

2021: IMF forecasts higher GDP growth for Nigeria at 2.5%

The International Monetary Fund (IMF) has projected growth of 2.5 percent for Nigeria this year indicating an increase from the one per cent it had predicted for the country in January.

The IMF in its latest World Economic Outlook titled: “Managing Divergent Recoveries,” also projected a 2.3 per cent economic growth for the country in 2022.  The Fund also anticipated a growth rate of 3.4 per cent for Africa this year, higher than the 0.2 per cent in its earlier forecast.

It noted that the pandemic continues to exact a large toll on sub-Saharan Africa (especially, for example, Ghana, Kenya, Nigeria, South Africa).

“Following the largest contraction ever for the region (-1.9 per cent in 2020), growth is expected to rebound to 3.4 per cent in 2021, significantly lower than the trend anticipated before the pandemic. Tourism-reliant economies will likely be the most affected,” it stated.

It further noted that some countries continue to observe high and volatile inflation and may be limited in the monetary accommodation they can provide without risking destabilising inflation.

“Rapidly rising food prices have already lifted headline inflation rates in some regions, including sub-Saharan Africa and Asia,” it added.

Furthermore, the IMF noted that economic recoveries are diverging across countries and sectors, reflecting variation in pandemic-induced disruptions and the extent of policy support.

“Global growth is projected at six per cent in 2021, moderating to 4.4 per cent in 2022. The projections for 2021 and 2022 are stronger than in the October 2020 WEO.”