Citing measures introduced to address insecurity in the oil sector, the International Monetary Fund (IMF) has revised upwards its growth forecast for Nigeria this year by 0.2 percentage points to 3.2 per cent from the 3.0 per cent it predicted in October.
The Fund, which disclosed this in its World Economic Outlook (WEO) Update titled, “Inflation peaking amid low growth,” released yesterday, however, lowered its growth estimate for Nigeria last year to 3.0 per cent from the 3.2 per cent it forecast in October. The global lender, which left its 2024 growth forecast for Nigeria unchanged at 2.9 per cent, stated that growth across sub-Saharan Africa would moderate at 3.8 per cent in 2023 amid prolonged fallout from COVID-19. It said: “In sub-Saharan Africa, growth is projected to remain moderate at 3.8 per cent in 2023 amid prolonged fallout from COVID-19, although with a modest upward revision since October, before picking up to 4.1 per cent 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 per cent, reflecting weaker external demand, power shortages, and structural constraints.” According to the Bretton Woods institution, global growth is projected to fall from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023, before rising to 3.1 per cent in 2024. It explained that “the forecast of low growth in 2023 reflects the rise in central bank rates to fight inflation–– especially in advanced economies––as well as the war in Ukraine.
The decline in growth in 2023 from 2022 is driven by advanced economies; in emerging market and developing economies, growth is estimated to have bottomed out in 2022. “Growth is expected to pick up in China with the full reopening in 2023. The expected pickup in 2024 in both groups of economies reflects gradual recovery from the effects of the war in Ukraine and subsiding inflation.
Following the path of global demand, world trade growth is expected to decline in 2023 to 2.4 per cent, despite an easing of supply bottlenecks, before rising to 3.4 per cent in 2024.” For emerging market and developing economies, the IMF said it projects growth to rise modestly, from 3.9 per cent in 2022 to 4.0 per cent in 2023 and 4.2 per cent in 2024, with an upward revision of 0.3 percentage point for 2023 and a downward revision of 0.1 percentage point for 2024, adding that about half of emerging market and developing economies have lower growth in 2023 than in 2022.
The Fund said it expects global inflation to fall from 8.8 percent in 2022 to 6.6 per cent in 2023 and 4.3 per cent in 2024, still above pre-pandemic (2017–19) levels of about 3.5 per cent. It estimates that having posted prices increases of 9.9 per cent in 2022, emerging and developing economies will see inflation falling to 8.1per cent in 2023 and 5.5per cent in 2024, still above the 4.9per cent average in 2017–2019. The Washington-based lender said it estimates that about 15per cent of lowincome countries are already in debt distress and 45per cent more are at high risk of getting there, with 1-in-4 emerging market economies also at high risk. On the risks to the projections, the IMF said: “The balance of risks remains tilted to the downside, but adverse risks have moderated since the October 2022 WEO. “On the upside, a stronger boost from pent-up demand in numerous economies or a faster fall in inflation are plausible.
