The International Monetary Fund (IMF) has revised its 2023 growth projection for Nigeria’s economy to 3.2% from an earlier projected 3.1%.
The IMF disclosed this in its World Economic Outlook Update published on Tuesday morning and seen by Nairametrics.
The Projections: Also, the IMF revealed that the global growth outlook for 2023 was revised upwards by 0.2 percentage points to 2.9%. Sub- Sahara’s GDP growth was also reviewed to 3.8% in 2023.
Nigeria is expected to grow by 3.2% in 2023 and later fall to 2.9% by 2024, while South Africa is expected to grow by 1.2% in 2023 and 1.3% in 2023.
The IMF’s report indicated that its Q4 2022 projections had earlier shown it expected Nigeria’s economy to grow by 3.1% in 2023 and 2.9% in 2024
Reason for Nigeria’s upward review: IMF noted the small upward revision for 2023 (0.1 percentage point) reflects Nigeria’s rising growth in 2023 due to measures to address insecurity issues in the oil sector, they said.
- “In sub-Saharan Africa, growth is projected to remain moderate at 3.8 percent in 2023 amid prolonged fallout from the COVID-19 pandemic, although with a modest upward revision since October, before picking up to 4.1 percent in 2024.
- “The small upward revision for 2023 (0.1 percentage point) reflects Nigeria’s rising growth in 2023 due to measures to address insecurity issues in the oil sector. In South Africa, by contrast, after a COVID-19 reopening rebound in 2022, projected growth more than halves in 2023, to 1.2 percent, reflecting weaker external demand, power shortages, and structural constraints.”
A higher global forecast: IMF revealed forecast for 2023 is 0.2 percentage points higher than predicted in the October 2022 World Economic Outlook (WEO) but below the historical (2000–19) average of 3.8 percent. They said:
- “Global growth is projected to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 per cent in 2024. The forecast for 2023 is 0.2 percentage points higher than predicted in the October 2022 World Economic Outlook (WEO) but below the historical (2000–19) average of 3.8 percent.
- “The rise in central bank rates to fight inflation and Russia’s war in Ukraine continue to weigh on economic activity. The rapid spread of COVID-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster-than-expected recovery. Global inflation is expected to fall from 8.8 percent in 2022 to 6.6 per cent in 2023 and 4.3 percent in 2024, still above pre-pandemic (2017–19) levels of about 3.5 per cent.”
They noted adverse risks have moderated since the October 2022 WEO and On the upside, a stronger boost from pent-up demand in numerous economies or a faster fall in inflation is plausible.
- “On the downside, severe health outcomes in China could hold back the recovery, Russia’s war in Ukraine could escalate, and tighter global financing costs could worsen debt distress. Financial markets could also suddenly reprice in response to adverse inflation news, while further geopolitical fragmentation could hamper economic progress.”
