The Nigerian economy is expected to increase by 3.3% this year, according to the International Monetary Fund (IMF), which projects that the country’s inflation rate would decrease to 26.3% in 2024.
The Bretton Woods institution maintained the growth prospects for Sub-Saharan Africa (SSA) in 2024 in its updated Global Economic Outlook for 2024, which was made public on Tuesday. This is because an improvement in Nigeria’s growth prospects more than offset a decrease in Angola’s growth forecast earlier in the year.
According to the research, Nigeria’s GDP will expand by 3.0% in 2025, which would be a 0.1% decrease from the Fund’s January 2024 forecast.
Furthermore, the SSA region, according to the report, is expected to grow by 3.8% in 2024 and 4.0% in 2025.
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The report stated, “In sub-Saharan Africa, growth is projected to rise from an estimated 3.4 percent in 2023 to 3.8 percent in 2024 and 4.0 percent in 2025, as the negative effects of earlier weather shocks subside, and supply issues gradually improve.”
The report highlighted that global growth is expected to remain stable at 3.2 percent in both 2024 and 2025, maintaining the same rate as it did in 2023. The growth forecast for 2024 has been adjusted upward by 0.1 percentage points since the January 2024 World Economic Outlook (WEO) update, and by 0.3 percentage points since the October 2023 WEO.
Additionally, the report indicated a slight uptick in growth for advanced economies, projected to increase from 1.6% in 2023 to 1.7% in 2024, and further to 1.8% in 2025.
Also, emerging markets and developing economies are expected to experience a slight deceleration in growth, decreasing from 4.3% in 2023 to 4.2% in both 2024 and 2025.
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The IMF’s projection for inflationary trend is similar to that of analysts who believe that Nigeria’s inflation will begin to trend downwards sometime this year.
However, the inflation has increased consistently from beginning of the year, starting at 29.90% in January and closing the first quarter at 33.2% in March.
The World Bank, in its recently published Africa Pulse publication, had projected Nigeria’s inflation to be lower than the IMF’s projection at 24.8% in 2024 and to settle at 15.1% in 2026. Coincidentally, the Bank and the Fund agreed on a 3.3% growth rate for the country.
The administration of President Tinubu has had to battle high inflation levels occasioned by the fuel subsidy removal and exchange rate revaluation. While efforts aimed at stabilising the foreign exchange market has yielded significant results in the past few weeks, the same cannot be said for the price of goods in the market.
