The International Monetary Fund, IMF, downgraded its forecast for Nigeria’s economic growth in 2024 to 3.1 percent on Tuesday, citing weaker growth recorded in the first quarter of the year, Q1’24.
The new forecast was contained in the July 2024 World Economic Outlook of the IMF released on Tuesday.
The downgrade represents 0.2 percentage points below the earlier forecast of 3.3 percent.
It followed weaker-than-expected gross domestic product, GDP, and growth recorded by the country in Q1’23.
Data from the National Bureau of Statistics, NBS, showed that Nigeria’s Gross Domestic Product, GDP, growth dropped quarter-on-quarter, QoQ, to 2.98 percent in Q1’24 from 3.46 percent in the fourth quarter of 2023, Q3’23.
The IMF, however, retained its 3.0 percent forecast for Nigeria’s economic growth in 2025.
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 percent from the April WEO forecast of 3.8 percent.
It, however, raised its economic growth forecast for the region in 2025 to 4.1 percent from 4.0 percent.
“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 said.
For the global economy, the IMF retained its growth forecasts of 3.2 percent in 2024 and 3.3 percent in 2025.
The IMF said, “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 percent in 2024 and 3.3 percent 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.
“Service 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.” [Vanguard]
