The International Monetary Fund (IMF) has upgraded Nigeria’s economic growth projection, forecasting a 3.9% expansion in 2025 and 4.2% in 2026.
The revised figures were announced on Tuesday during the launch of the World Economic Outlook (WEO) 2025 at the ongoing World Bank and IMF Annual Meetings in Washington, D.C.
In its July 2025 update, the IMF had projected Nigeria’s growth at 3.4 percent, but the latest report reflects a 0.5 percentage point increase, signaling renewed confidence in the country’s reform-driven economic recovery.
Also, the Fund projected that the Nigerian economy would grow by 4.2% in 2026, an improvement from 3.2% it predicted in July.
The Fund’s updated projection places Nigeria ahead of South Africa but slightly below the broader Sub-Saharan African regional average.
According to the report, South Africa’s growth forecast was raised marginally from 1.0 to 1.1 percent for 2025 but revised downward from 1.3 to 1.2 percent for 2026. Meanwhile, Sub-Saharan Africa’s growth outlook improved from 4.0 to 4.1 percent for 2025 and from 4.3 to 4.4 percent for 2026.
Higher oil output, investor confidence, and fiscal reforms key drivers of improved outlook
In the report, IMF attributed Nigeria’s upgraded growth forecast to a combination of supportive domestic factors, including increased oil production, rising investor confidence, and a more favorable fiscal stance projected for 2026.
The Fund noted, “Whereas growth in Nigeria is revised upward on account of supportive domestic factors, including higher oil production, improved investor confidence, a supportive fiscal stance in 2026, and given its limited exposure to higher US tariffs, many other economies see significant downward revisions because of the changing international trade and official aid landscape,” IMF stated.
Global growth projected at 3.2%
On the global front, the IMF projects that growth will moderate to 3.2 percent in 2025 and further to 3.1 percent in 2026. This marks a slight improvement from the July 2025 WEO update but remains 0.2 percentage points below earlier forecasts made prior to recent global policy shifts.
“This is an improvement relative to the July WEO Update—but cumulatively 0.2 percentage point below forecasts made before the policy shifts in the October 2024 WEO, with the slowdown reflecting headwinds from uncertainty and protectionism, even though the tariff shock is smaller than originally announced,” IMF said.
The report further notes that advanced economies are expected to expand by around 1.5 percent over 2025–2026, with the United States slowing to 2.0 percent.
More insights
According to IMF, emerging markets and developing economies are projected to grow just above 4.0 percent during the same period.
- Global inflation is forecast to decline to 4.2 percent in 2025 and 3.7 percent in 2026, while world trade volume is expected to grow at an average rate of 2.9 percent in 2025–2026—slower than the 3.5 percent recorded in 2024, as trade fragmentation continues to limit gains.
What you should know
- In July, the IMF announced that its Executive Board has concluded the 2025 Article IV consultation with Nigeria, projecting a 3.4 percent expansion in the country’s real GDP for 2025.
The Fund backed the Central Bank of Nigeria’s (CBN) sustained tight monetary policy stance, describing it as a critical tool in managing inflation and safeguarding macroeconomic stability.
