IMF Cuts Nigeria Growth Forecast
The International Monetary Fund (IMF) has revised Nigeria’s 2022 real gross domestic product (GDP) growth forecast down to 3% from 3.4% earlier, citing weak oil production and the adverse effects of recent flooding.
“Output growth is expected to moderate in 2022 to 3% and improve slightly next year,” the IMF said in a statement.
In June, the IMF said Nigeria’s real GDP growth was broadening to all sectors except oil but inflation remains elevated. It added that the economic outlook for Africa’s most populous nation and top oil producer was challenging, with high food prices raising food security concerns.
The IMF said double-digit inflation in Nigeria is expected to moderate at end-2022 as the start of the harvest season more than counters the projected increase in rice prices caused by recent flooding. READ: Fitch Cuts Global GDP Forecast to 2.4%
“Notwithstanding higher oil prices, the economy is expanding at slightly above the population growth rate”, IMF said in a release today.
It noted that the double-digit increases in Nigeria’s terms of trade and significant improvement in the trade balance created an opportunity to build fiscal space and foreign exchange (FX) reserves, but that opportunity was not harnessed.
Inflation is elevated and fuel subsidies remain a formidable drain on fiscal revenues. IMF said for the country, ensuring macroeconomic stability requires tightening across all policy levers, and stronger revenue mobilization and exchange rate reforms.
In addition to consistent macroeconomic policies, a more robust growth trajectory would require measures to decisively tackle governance weaknesses and implement trade and agricultural reforms, it added. #IMF Cuts Nigeria Growth Forecast