The International Monetary Fund (IMF) has revised its forecast for Nigeria's economic growth in 2024, lowering it to 3.1% from the earlier projection of 3.3%. This adjustment follows weaker-than-expected growth in the first quarter of the year.
The revised forecast is detailed in the IMF's July 2024 World Economic Outlook, reflecting a 0.2 percentage point reduction due to Nigeria's underperforming Gross Domestic Product (GDP) growth in Q1'24. According to data from the National Bureau of Statistics (NBS), Nigeria's GDP growth declined to 2.98% in the first quarter of 2024, down from 3.46% in the last quarter of 2023.
Despite this downgrade, the IMF maintains its forecast of 3.0% economic growth for Nigeria in 2025.
The IMF also downgraded its 2024 economic growth forecast for Sub-Saharan Africa from 3.8% to 3.7%, primarily due to Nigeria's weaker performance. However, it raised the region's 2025 growth forecast from 4.0% to 4.1%.
“The forecast for growth in Sub-Saharan Africa is revised downward, mainly due to the 0.2 percentage point reduction in Nigeria's growth outlook amid weaker-than-expected activity in the first quarter,” the IMF stated.
Globally, the IMF has kept its growth forecasts steady at 3.2% for 2024 and 3.3% for 2025. The IMF noted that while global growth projections remain consistent with the April 2024 World Economic Outlook, varying momentum in economic activity has narrowed output divergences among economies as cyclical factors diminish and activities align more closely with potential.
“Services price inflation is impeding disinflation efforts, complicating monetary policy normalization. This increases the risk of prolonged higher interest rates amidst rising trade tensions and policy uncertainties,” the IMF noted.
The IMF emphasized the importance of carefully sequencing policy measures to manage these risks, achieve price stability, and restore economic resilience.
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