The International Monetary Fund (IMF) has revised Nigeria’s growth projection for 2021 higher from the 1.5 percent growth it had earlier forecasted
The IMF in its World Economic Outlook (WEO) report released on Tuesday forecasted that Nigeria’s real Gross Domestic Product (GDP) would grow at 2.5 percent by the end of the year.
The report also estimated that Nigeria’s consumer prices will fall to 14.5 percent in 2021 from 15.8 percent last year while current account balances for the country will rise to -2.2 percent from -3.7 percent recorded in 2020.
The IMF also estimated that Nigeria’s economy would grow to 2.3 percent by 2022.
The international organization noted that the pandemic had continued to affect the economy of Nigeria and other countries in sub-Saharan Africa, including Ghana, Kenya, and South Africa.
“Following the largest contraction ever for the region (–1.9 percent in 2020), growth is expected to rebound to 3.4 percent in 2021, significantly lower than the trend anticipated before the pandemic. Tourism-reliant economies will likely be the most affected,” the report stated.
Globally, the fund also projected a stronger recovery in 2021 and 2022 for the global economy compared to its previous forecast, with growth projected to be 6 percent in 2021 and 4.4 percent in 2022.
However, it said the outlook presented daunting challenges related to divergences in the speed of recovery both across and within countries and the potential for persistent economic damage from the crisis.
Commenting on the report, the Chief Economist at IMF, Gita Gopinath, said, “The pandemic is yet to be defeated and virus cases are accelerating in many countries. Recoveries are also diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support, and more reliance on tourism do less well.
“The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizeable upgrade for the United States (1.3 percentage points) that is expected to grow at 6.4 percent this year.
“This makes the United States the only large economy projected to surpass the level of GDP it was forecast to have in 2022 in the absence of this pandemic.”