The International Monetary Fund, IMF yesterday downgraded its forecast for Nigeria’s 2024 economic growth to 3.0 per cent.
This represents one percentage point below the growth forecast of 3.1 percent made in October 2023. The IMF however affirmed its 3.1 per cent forecast for Nigeria’s economy in 2025.
The downgrade was announced by the IMF in its World Economic Outlook update January 2024 released yesterday.
The IMF also downgraded its economic growth forecast for the Sub Saharan Africa region in 2024 to 3.2 per cent from 3.4 earlier forecast in October last year.
In contrast, the IMF upgraded its forecast for global economic 2024 growth forecast to 3.1 percent from 2.9 per cent earlier forecast in October last year.
The IMF stated: “Global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 World Economic Outlook (WEO) on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China.
In its forecast for the Sub Saharan Africa region, IMF said: “In sub-Saharan Africa, growth is projected to rise from an estimated 3.3 percent in 2023 to 3.8 percent in 2024 and 4.1 percent in 2025, as the negative effects of earlier weather shocks subside and supply issues gradually improve.
The downward revision for 2024 of 0.2 percentage point from October 2023 mainly reflects a weaker projection for South Africa on account of increasing logistical constraints, including those in the transportation sector, on economic Activity.”
On policy priorities for governments across the world, the IMF said: “As inflation declines toward target levels across regions, the near-term priority for central banks is to deliver a smooth landing, neither lowering rates prematurely nor delaying such lowering too much.
“With inflation drivers and dynamics differing across economies, policy needs for ensuring price stability are increasingly differentiated.
“At the same time, in many cases, amid rising debt and limited budgetary room to maneuver, and with inflation declining and economies better able to absorb effects of fiscal tightening, a renewed focus on fiscal consolidation is needed. Intensifying supply enhancing reforms would facilitate both inflation and debt reduction and enable a durable rise in living standards.”