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IMF Revises Nigeria’s 2024 Growth Projection Marginally To 3%, Retains 2025 Forecast At 3.1%

The growth projection is 3.76% lower than

 in Nigeria’s 2024 budget.

The International Monetary Fund (IMF) in its January edition of World Economic Outlook (WEO) slightly lowered its growth projections for the country for 2024 to three percent, from the 3.1 percent earlier projected in its WEO released last October.

The IMF growth projection was lower than the 3.76 percent projection in Nigeria’s 2024 budget.

The multilateral lender also made a 3.1 percent forecast for Nigeria in 2025 in its latest WEO released on Tuesday.

The IMF equally nudged its global growth forecast higher, citing the unexpected strength of the United States economy and fiscal support measures in China.

It predicted a 3.8 percent growth for Sub-Saharan Africa in 2024, from 3.3 percent in the preceding year.

The WEO report stated: “In sub-Saharan Africa, growth is projected to rise from an estimated 3.3 percent in 2023 to 3.8 percent in 2024 and 4.1 percent in 2025, as the negative effects of earlier weather shocks subside, and supply issues gradually improve.

“The downward revision for 2024 of 0.2 percentage point from October 2023 mainly reflects a weaker projection for South Africa on account of increasing logistical constraints, including those in the transportation sector, on economic activity.

“”But global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, with the 2024 forecast 0.2 percentage point higher than that of October 2023 on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China.”

The forecast for 2024–2025 was, however, below the historical (2000–19) average of 3.8 percent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth.

The brighter outlook for the global economy was due largely to the strength of the U.S. economy, which grew 3.1 percent last year.

China’s economy is also growing faster than previously thought and is projected to grow 4.6 percent this year.

The IMF also expressed trepidation about President Joe Biden’s use of industrial policy to subsidise America’s clean energy and semiconductor sectors.

Gourinchas said such actions had been leading to a “tit for tat” in trade restrictions, one that weighed on global output.

Global headline inflation was expected to fall from an estimated 6.8 percent in 2023 (annual average) to 5.8 percent in 2024 and 4.4 percent in 2025.

The global forecast was unrevised for 2024 compared with October 2023 projections and revised down by 0.2 percentage point for 2025.

Ndubuisi Francis, James Emejo, Chinedu Eze and Nume Ekeghe

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