By Charles Ebi
International Monetary Fund ,IMF, has projected Nigeria’s economy to expand by 3.2% in the coming year 2025 while inflation is estimated to drop to 25% in the same year.
The Fund in its recently published World Economic Outlook ,WEO, projected global economic growth in 2025 to remain unchanged at 3.2% from 2024.
The projection for the global economy represents a decline of 0.1% from the Fund’s earlier projection in July 2024.
For Nigeria, the IMF’s recent GDP growth projection for 2025 represents a 0.2% increase from its earlier projection in July of this year.
According to the Fund, GDP growth in 2024 will stay at 2.9%- a downgrade compared to its projection in July of this year.
On inflation, the Washington-based Institution projected Nigeria’s inflation to steady at 25% in 2025 and 14% by 2029.
Furthermore, the global lender put Sub-Saharan Africa’s economic growth rate for the coming year at 4.2%- a downgrade compared to its earlier projection in April 2024.
The report pointed out climate change-induced weather shocks and supply chain constraints coupled with slower growth in Nigeria and a 26% contraction in Sudan’s economy due to ongoing conflicts in the country.
The report states, “In sub-Saharan Africa, GDP growth is similarly projected to increase, from an estimated 3.6% in 2023 to 4.2% in 2025, as the adverse impacts of prior weather shocks abate and supply constraints gradually ease”.
“Compared with that in April, the regional forecast is revised downward by 0.2 percentage points for 2024 and upward by 0.1 percentage points for 2025. Besides the ongoing conflict that has led to a 26% contraction of the South Sudanese economy, the revision reflects slower growth in Nigeria, amid weaker-than-expected activity in the first half of the year”.
Nigeria’s economy in the first and second quarter of the year grew by 2.98% and 3.19% respectively amid a surge in inflation and further depreciation of the Naira.
The GDP growth rate in the first two quarters of 2024 surpassed the figure for 2023 representing resilience despite severe macroeconomic shocks with a spike in petrol prices and a 28-year high inflation rate.
Nigeria’s inflation rate only began to slow down in July 2024 after 19 months of consistent increase dating back to January 2023.
However, after two months of slowdown hiatus, inflation continued to rise on the back of an increase in petrol prices by the NNPCL in September.
