IMF upgrades Nigeria’s 2023 economic growth projection to 3.2%

The International Monetary Fund (IMF) has raised Nigeria’s economic growth projection to 3.2 per cent for this year.

This is 0.1 percentage point higher than the 3.0 per cent earlier projected in its October 2022 report.

The IMF disclosed this in its January 2023 world economic outlook (WEO), saying the slight upward review was due to measures to address insecurity issues in the oil sector.

The report titled ‘Inflation peaking amid low growth’ showed Nigeria’s growth rate would slow to 2.9 per cent in 2024.

The organisation said growth in sub-Saharan Africa is expected to remain moderate at 3.8 per cent in 2023 amid prolonged fallout from the COVID-19 pandemic, although with a modest upward revision since October, before picking up to 4.1 percent in 2024.

Unlike sub-Saharan Africa, the IMF said growth in the Middle East and Central Asia would decline from 5.3 percent in 2022 to 3.2 percent in 2023.

According to the organisation, this is attributable to a “steeper-than-expected growth slowdown in Saudi Arabia, from 8.7 per cent (which was stronger than expected by 1.1 percentage points) to 2.6 percent in 2023, with a negative revision of 1.1 percentage points”.

“The downgrade for 2023 reflects mainly lower oil production in line with an agreement through OPEC+ (Organization of the Petroleum Exporting Countries, including Russia and other non-OPEC oil exporters), while non-oil growth is expected to remain robust,” the IMF explained.

Overall, the IMF said global growth is projected to fall from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023, then rise to 3.1 percent in 2024.

“The global economy is poised to slow this year, before rebounding next year. Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, the chief economist and director of IMF’s research department, said.

“Despite these headwinds, the outlook is less gloomy than in our October forecast, and could represent a turning point, with growth bottoming out and inflation declining.”

The IMF said about 84 per cent of countries are expected to have lower headline inflation in 2023.

It said global inflation was set to fall from 8.8 per cent in 2022 to 6.6 per cent in 2023 and 4.3 per cent in 2024 — above pre-pandemic (2017–19) levels of about 3.5 per cent.