IMF Downgrades Nigeria’s Economic Growth Forecast for Year 2024 to 3%

The Washington-based lender made this known in its “World Economic Update: January 2024”, released on Tuesday.

The multilateral institution also trimmed its forecast for sub-Saharan 2024 economic growth to 3.2 per cent from 3.4 earlier forecast in October 2023.

In contrast, the Fund upgraded its forecast for global economic 2024  growth forecast to 3.1 percent from 2.9 per cent earlier forecast in October last year.

The IMF stated: “Global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 World Economic Outlook (WEO) on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China.

“In sub-Saharan Africa, growth is projected to rise from an estimated 3.3 percent in 2023 to 3.8  percent in 2024 and 4.1 percent 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 points 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, it added.

The IMF projected overall global economic growth at 3.1 per cent in 2024 and 3.2 per cent in 2025. This represents 0.2 percentage points higher than what it projected in its October 2023.

According to the Fund, 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.

The report 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.”