June 11, 2023

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IMF Reviews Nigeria’s Economic Growth for 2023 Upward

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CEM REPORT,  ECONOMY | Against its earlier projection of 3.1% the International Monetary Fund (IMF) has reviewed its growth projection for Nigeria’s economy by 0.1% (3.2%).

The IMF also reviewed the global growth outlook for 2023 upward by 0.2% points to 2.9%. Sub- Sahara’s GDP growth was also reviewed to 3.8% for 2023.

The IMF disclosed this in its World Economic Outlook Update recently published.

The report noted that Nigeria is expected to grow by 3.2% in 2023 and later fall to 2.9% by 2024.

The body explained that the upward review is a result country’s rising growth in 2023 due to measures to address insecurity issues in the oil sector.

“The small upward revision for 2023 (0.1 percentage point) reflects Nigeria’s rising growth in 2023 due to measures to address insecurity issues in the oil sector. In South Africa, by contrast, after a COVID-19 reopening rebound in 2022, projected growth more than halves in 2023, to 1.2 percent, reflecting weaker external demand, power shortages, and structural constraints.”

“In sub-Saharan Africa, growth is projected to remain moderate at 3.8 percent in 2023 amid prolonged fallout from the COVID-19 pandemic, although with a modest upward revision since October, before picking up to 4.1 percent in 2024.”

IMF revealed forecast for 2023 is 0.2 percentage points higher than predicted in the October 2022 World Economic Outlook (WEO) but below the historical (2000–19) average of 3.8 percent.

“Global growth is projected to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 per cent in 2024. The forecast for 2023 is 0.2 percentage points higher than predicted in the October 2022 World Economic Outlook (WEO) but below the historical (2000–19) average of 3.8 percent.

“The rise in central bank rates to fight inflation and Russia’s war in Ukraine continue to weigh on economic activity. The rapid spread of COVID-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster-than-expected recovery. Global inflation is expected to fall from 8.8 percent in 2022 to 6.6 per cent in 2023 and 4.3 percent in 2024, still above pre-pandemic (2017–19) levels of about 3.5 per cent.”

They noted adverse risks have moderated since the October 2022 WEO and on the upside, a stronger boost from pent-up demand in numerous economies or a faster fall in inflation is plausible.

“On the downside, severe health outcomes in China could hold back the recovery, Russia’s war in Ukraine could escalate, and tighter global financing costs could worsen debt distress. Financial markets could also suddenly reprice in response to adverse inflation news, while further geopolitical fragmentation could hamper economic progress.”

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