The International Monetary Fund, IMF, has yesterday downgraded its earlier forecast for Nigeria’s economic growth in 2024 to 3.1 per cent giving reason of recorded weaker growth during the first quarter of the year, Q1’24. The new forecast was contained in the July 2024 World Economic Outlook of the IMF released, yesterday.
Accordingly, the downgrade represents 0.2 percentage points below the earlier forecast of 3.3 per cent.
Comparing the last year 2023 Gross Domestic Product, GDP, and growth recorded by the country in Q1’23 visa a-viz that of Q1’24 the GDP indicate weaker growth than-expected.
Data from the National Bureau of Statistics, NBS, showed that Nigeria’s Gross Domestic Product, GDP, growth has dropped, quarter-on-quarter, QoQ to 2.98 per cent in Q1’24 from 3.46 per cent in the fourth quarter of 2023, Q3’23.
The global acclaimed expert however retained that 3.0 per cent forecast for Nigeria’s economic growth in 2025 is still feasible.
As a result of the lower forecast for Nigeria’s economic growth, the IMF also downgraded its forecast for Sub-Saharan economic growth in 2024 to 3.7 per cent from the April WEO forecast of 3.8 per cent. It however raised its economic growth forecast for the region in 2025 to 4.1 per cent from 4.0.
The IMF statement partly said, “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”.
Considering the global economy at large, the IMF maintained that the growth forecasts of 3.2 per cent in 2024 and 3.3 per cent in 2025 is expected.
The statement added: “The Global Economy in a Sticky Spot Global growth is projected to be in line with the April 2024 World Economic Outlook (WEO) forecast, at 3.2 per cent in 2024 and 3.3 per cent in 2025.
“However, varied momentum in activity at the turn of the year has somewhat narrowed the output divergence across economies as cyclical factors wane and activity becomes better aligned with its potential.
“Services price inflation is holding up progress on disinflation, which is complicating monetary policy normalization. Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty.
“To manage these risks and preserve growth, the policy mix should be sequenced carefully to achieve price stability and replenish diminished buffers” the statement concluded.
