IMF Lowers Nigeria’s 2024 Growth Forecast To 3.1%
By People’s Voice Nigeria | News
Citing “weaker than expected activity in the first quarter of this year,” the International Monetary Fund (IMF) has lowered its forecast for Nigeria’s economic growth in 2024 to 3.1 per cent from the 3.3 per cent growth projection for the country that it announced in April.
The IMF, which disclosed this in an update to its World Economic Outlook (WEO) titled, “The Global economy in a sticky spot”, released on Tuesday, however, retained its growth forecast for Nigeria next year at 3.0 per cent.
The Fund explained that the downward revision to the growth outlook in Nigeria this year resulted in its revising downwards the forecast for growth in Sub-Saharan Africa to 3.7 per cent from the 3.8 per cent it projected in April.
The Bretton Woods institution, however, raised its growth projection for the region next year to 4.1 per cent, from the 4.0 per cent it had forecast in April.
“The forecast for growth in sub-Saharan Africa is revised downward, mainly as a result of a 0.2 percentage point downward revision to the growth outlook in Nigeria amid weaker than expected activity in the first quarter of this year,” the IMF stated.
According to the Fund, the global economy is likely to record modest growth over the next two years amid cooling activity in the United States, a bottoming-out in Europe and stronger consumption and exports for China.
Specifically, the IMF kept its 2024 global real Gross Domestic Product (GDP) growth forecast unchanged from April at 3.2 per cent and raised its 2025 forecast by 0.1 percentage point to 3.3 per cent.
While it reduced the U.S. growth forecast for this year by 0.1 percentage point to 2.6 per cent, the Fund left its 2025 U.S. growth forecast unchanged at 1.9 per cent.
By contrast, the IMF significantly hiked its China growth forecast to 5.0 per cent from 4.6 per cent in April due to a first-quarter rebound in private consumption and strong exports. The IMF also boosted its 2025 China growth forecast to 4.5 per cent from 4.1 per cent in April.
Similarly, the IMF upgraded its 2024 eurozone growth forecast by 0.1 percentage point to 0.9per cent, leaving the bloc’s 2025 forecast unchanged at 1.5per cent.
In a blog post accompanying the report, IMF chief economist, Pierre-Olivier Gourinchas, said: “Growth in major advanced economies is becoming more aligned as output gaps are closing.” He added that while the U.S. was showing increasing signs of cooling, Europe was poised to pick up.
The IMF warned that momentum in the fight against inflation is slowing, which could further delay an easing of interest rates and keep up strong dollar pressure on developing economies.
According to the Fund, renewed trade and geopolitical tensions could stoke price pressures by increasing the cost of imported goods along the supply chain.
“The risk of elevated inflation has raised the prospects of higher-for-even-longer interest rates, which in turn increases external, fiscal and financial risks,” the IMF said.
