The International Monetary Fund (IMF) has projected that Nigeria is heading to a recession, its worst recession in three decades, as it expects the nation’s economy to recede by 3.4% in 2020. This was disclosed by the global lender in its latest edition of the World Economic Outlook report on Tuesday.
The report, which was released at the ongoing virtual Spring Meeting in Washington, stated that after the 3.4% recede, the Nigerian economy is expected to grow by 2.4% in 2021.
Chief Economist, IMF, Gita Gopinath, said, “For the first time since the Great Depression, both the advanced economies and emerging and developing economies are in a recession.
“For 2020, growth in advanced economies is projected at -6%. Emerging markets and developing economies which typically have normal growth levels well above advanced economies are also projected to have negative growth of -1% and -2.2% if you exclude China.”
In the report, the global economy is projected to contract sharply by -3% in 2020 due to the coronavirus pandemic. This is a much worse contraction that happened during the financial crisis of 2008/2009.
It stated, “There is extreme uncertainty around the global growth forecast but we know the global economy will be in recession in 2020, with markdowns on the projections expected across regions and countries’’.
Although the global economy is projected to have a 5.8% growth in 2021, the IMF added that effective policies are essential to forestall the possibility of worse outcomes and the necessary measures to reduce the coronavirus disease and protect lives are an important investment in long-term human and economic health.
The report also projected that sub-Saharan Africa will contract by -1.6% in 2020, but will have a growth of 4.1% in 2021.