IMF lowers Nigeria’s economic growth projection

IMF lowers Nigeria’s economic growth projection

The International Monetary Fund has downgraded Nigeria’s economic growth by 0.3 percentage points to 2.9 per cent for 2023 following weaker oil and gas production.

The IMF disclosed this in its new World Economic Outlook for October released on Tuesday under the theme ‘Navigating Global Divergences’.

The lender in July projected that Nigeria’s economy would grow by 3.2 per cent in 2023. It predicted that growth in the country would be impacted by security issues in the oil sector.

IMF said, “Growth in Nigeria is projected to decline from 3.3 per cent in 2022 to 2.9 per cent in 2023 and 3.1 per cent in 2024, with negative effects of high inflation on consumption taking hold.

“The forecast for 2023 is revised downward by 0.3 percentage point, reflecting weaker oil and gas production than expected, partially as a result of maintenance work.”

According to the National Bureau of Statistics, Nigeria’s GDP grew by 2.51 per cent in the second quarter of 2023.

The IMF said growth in the sub-Saharan African region could decline to 3.3 per cent in 2023 due to worsening weather shocks, the global slowdown, and domestic supply issues.

It, however, stated that this growth would pick up by 2024 to 4.0 per cent in 2024, still below the region’s historical average of 4.8 per cent.

It also stated, “Advanced economies are expected to slow from 2.6 per cent in 2022 to 1.5 per cent in 2023 and 1.4 per cent in 2024 as policy tightening starts to bite. Emerging market and developing economies are projected to have a modest decline in growth from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024.”

Although the IMF said monetary tightening was starting to bear fruit, a main driver for the fall in headline inflation projected for 2023 was declining international commodity prices.

Indeed, it noted that nearly three-quarters of economies should experience lower headline inflation in 2023.

The IMF said these economies would see (annual average) inflation fall by 2.7 percentage points in 2023, about double the (1.3 percentage point) decline projected for emerging markets and developing economies