IMF Raises It’s Forecast For Nigeria’s Economic Growth To 3.4%

The International Monetary Fund (IMF) has raised its forecast for Nigeria’s economic growth in 2022 to 3.4 per cent, citing increase in crude oil prices.

However, the IMF reduced its projection for global growth to 3.6 per cent in both 2022 and 2023, citing the impact of costly humanitarian crisis economic damage from the Russia war on Ukraine.

The IMF stated this in its April World Economic Outlook, WEO, report released as part of activities at the ongoing IMF/World Bank spring meeting in Washington.

The new forecast represents 0.7 percentage points and 0.4 percentage points higher than the 2.7 percent projected by the IMF in January for the country’s economic growth in 2022 and 2023.

Similarly, the IMF upgraded its economic growth forecast for the Sub-Saharan African region to 3.8 per cent in 2022, representing a 0.1 percentage point increase from the 3.7 per cent forecast made in January.

The IMF said: “In sub-Saharan Africa, food prices are also the most important channel of transmission, although in slightly different ways. Wheat is a less important part of the diet, but food in general is a larger share of consumption.

“Higher food prices will hurt consumers’ purchasing power—particularly among low-income households—and weigh on domestic demand. Social and political turmoil, most notably in West Africa, also weigh on the outlook.

“The increase in oil prices has however lifted growth prospects for the region’s oil exporters, such as Nigeria. Overall, growth in sub-Saharan Africa is projected at 3.8 percent in 2022″

Lower global growth forecast.

On the decision to revised downward its projection for global economic growth, Pierre-Olivier Gourinchas, Economic Counsellor and Director of the Research Department, IMF, said: “Compared to our January forecast, we have revised our projection for global growth downwards to 3.6 percent in both 2022 and 2023.

“This reflects the direct impact of the war on Ukraine and sanctions on Russia, with both countries projected to experience steep contractions. This year’s growth outlook for the European Union has been revised downward by 1.1 percentage points due to the indirect effects of the war, making it the second largest contributor to the overall downward revision

“The war adds to the series of supply shocks that have struck the global economy in recent years. Like seismic waves, its effects will propagate far and wide—through commodity markets, trade, and financial linkages.”