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IMF downgrades Nigeria’s economic growth to 3%

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The International Monetary Fund has downgraded Nigeria’s economic growth projections for 2024 to 3.0 per cent from 3.1 per cent in its October forecast.

This was disclosed in its ‘World Economic Outlook Update, January 2024,’ released on Tuesday. In its prediction for sub-Saharan Africa, the IMF expects economic growth to hit 3.8 per cent in 2024.

It said, “In sub-Saharan Africa, growth is projected to rise from an estimated 3.3 per cent in 2023 to 3.8 per cent in 2024 and 4.1 per cent in 2025, as the negative effects of earlier weather shocks subside, and supply issues gradually improve.

“The downward revision for 2024 of 0.2 percentage point from October 2023 mainly reflects a weaker projection for South Africa on account of increasing logistical constraints, including those in the transportation sector, on economic activity.”

Overall global economic growth is projected at 3.1 per cent in 2024 and 3.2 per cent in 2025. 2024’s forecast is 0.2 percentage points higher than what the Washington-based lender projected in its October 2023 World Economic Outlook.

It stated that this expected growth is due to expected resilience in the United States and several large emerging markets and developing economies, as well as fiscal support in China.

It added, “The forecast for 2024–25 is, however, below the historical (2000–19) average of 3.8 per cent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth. Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy.”

The IMF had in October 2023 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) themed, ‘Navigating Global Divergences,’.

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

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