IMF Projects Nigeria Economic Growth to Hit 3.5% in 2024

The International Monetary Fund (IMF) has projected that global economic growth will continue upward, leading to declining inflation rates in 2024 and 2025.

This projection from the body comes after a record of better performance, which the IMF terms "surprisingly resilient." 

The IMF also stated that Nigeria's economic growth will surge from 0.2% to 3.5% in 2024. However, it revealed that growth for 2025 will see a cutback of -0.4% to 2.5%.

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It was also reported that the IMF, in its most recent World Economic Outlook projection, now projects a 3.2% global expansion for 2024, which is in line with the growth rate observed in 2023 and marginally higher than the 3.1% projected in January.

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The IMF also announced a continuation of 3.2% growth for the third consecutive year in 2025.

"The forecast for 2024 is revised by 0.1 percentage point from the January 2024 WEO Update and by 0.3 percentage point from the October 2023 WEO.

"The pace of expansion is low by historical standards, owing to both near-term factors, such as still-high borrowing costs and withdrawal of fiscal support, and longer-term effects from the COVID-19 pandemic and Russia's invasion of Ukraine; weak growth in productivity; and increasing geoeconomic fragmentation," it said.

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Additionally, the IMF predicted that as supply problems gradually get resolved and the negative effects of earlier weather shocks fade, Sub-Saharan Africa's growth would increase from an estimated 3.4% in 2023 to 3.8% in 2024 and 4.0% in 2025.

"The forecast is unchanged for 2024 from the January 2024 WEO Update, as a downward revision to Angola owing to a contraction in the oil sector is broadly offset by an upward revision to Nigeria," it said.

The IMF predicted that, with some regional differences, emerging markets and developing economies would see steady growth through 2024 and 2025.

It added that stable economic growth had followed the decline in global inflation from its mid-2022 peak, notwithstanding early fears of stagflation and recession. According to a report, factors contributing to the growth in employment and incomes globally include robust household consumption, higher government spending, and a notable increase in labour force participation.

The IMF claims that households in major advanced economies could access substantial savings accumulated during the pandemic, contributing to the unexpected economic resilience that occurred despite large central bank interest rate hikes intended to restore price stability.

Regarding declining inflation, the IMF said global headline inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging markets and developing economies.

According to the IMF, the factors contributing to decreasing core inflation are diminishing pass-through effects from previous declines in relative prices, particularly in energy, the consequences of continuing tight monetary policy, and a corresponding loosening of labour markets.

About IMF (Direct From Its Website)

The International Monetary Fund (IMF) works to achieve sustainable growth and prosperity for all of its 190 member countries. It does so by supporting economic policies that promote financial stability and monetary cooperation, essential to increase productivity, job creation, and economic well-being. The IMF is governed by and accountable to its member countries. 

The IMF has three critical missions: furthering international monetary cooperation, encouraging trade and economic growth expansion, and discouraging policies that would harm prosperity. To fulfill these missions, IMF member countries work collaboratively with each other and with other international bodies.