The International Monetary Fund (IMF) has forecasted that Nigeria’s economy will grow by 3.2% in 2025, while inflation is expected to decrease to 25% that same year. This was revealed in the IMF’s latest World Economic Outlook (WEO) report, which also projects global economic growth to remain steady at 3.2% in 2025, unchanged from 2024.
Globally, the updated growth forecast reflects a slight 0.1% reduction from the IMF’s earlier estimate in July 2024. For Nigeria, the IMF’s revised GDP growth estimate for 2025 marks a 0.2% increase from its previous July 2024 projection. In contrast, GDP growth for 2024 is expected to hold at 2.9%, a downgrade from earlier projections.
Regarding inflation, the IMF expects Nigeria’s inflation rate to stabilize at 25% in 2025, with a further decline to 14% by 2029.
Economic Growth in Sub-Saharan Africa
The IMF has also revised its forecast for Sub-Saharan Africa, predicting a 4.2% growth rate for 2025, which represents a downward revision compared to the 4.4% forecasted in April 2024. The report attributes this adjustment to challenges such as climate-induced weather disruptions, supply chain constraints, and slower growth in key economies like Nigeria. Additionally, ongoing conflicts in Sudan are expected to cause a 26% contraction in the country’s economy.
The report highlights, “In sub-Saharan Africa, GDP growth is projected to rise from an estimated 3.6% in 2023 to 4.2% in 2025, as the negative effects of earlier weather shocks diminish and supply issues ease.”
It further notes that, compared to April’s forecast, the regional growth outlook has been lowered by 0.2 percentage points for 2024, but slightly raised by 0.1 percentage points for 2025. In addition to Sudan’s contraction, Nigeria’s slower-than-expected economic activity in early 2024 contributed to the downward revision.
Insights on Nigeria’s Economy
Nigeria’s economy demonstrated resilience in the first half of 2024, growing by 2.98% in the first quarter and 3.19% in the second quarter, despite inflationary pressures and continued depreciation of the Naira. This growth rate exceeded 2023 levels, reflecting the country’s ability to weather macroeconomic shocks, including rising petrol prices and the highest inflation rate in 28 years.
Nigeria’s inflation rate finally began to decelerate in July 2024, following 19 consecutive months of increases dating back to January 2023. However, after a brief two-month slowdown, inflation surged again due to a petrol price hike by the Nigerian National Petroleum Corporation Limited (NNPCL) in September.
