IMF: Nigeria’s Economy To Grow By 3.2% In 2025

…inflation to drop to 25% 

Nigeria’s economy is projected to expand by 3.2 per cent in 2025, while inflation is estimated to drop to 25% in the same year, the International Monetary Fund (IMF) has said.

The Fund disclosed this in its World Economic Outlook (WEO) released on Tuesday, October 22.

It also projected global economic growth in 2025 to remain unchanged at 3.2 per cent from 2024.

The projection for the global economy depicts a decline of 0.1 per cent from the Fund’s earlier projection in July 2024.
And for Nigeria, the IMF’s recent GDP growth projection for 2025 indicates a 0.2 per cent increase from its earlier projection last July.

However, the Fund said the GDP growth in 2024 will stay at 2.9 per cent – a reduction compared to its last July projection.

On inflation, the IMF said Nigeria’s inflation is expected to be stable at 25 per cent in 2025 and 14 per cent by 2029.
The Sub-Saharan Africa’s economic growth rate for 2025 on the other hand, is projected to be at 4.2 per cent – 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 per cent contraction in Sudan’s economy due to ongoing conflicts in the country.

“In sub-Saharan Africa, GDP growth is similarly projected to increase, from an estimated 3.6 per cent in 2023 to 4.2 per cent in 2025, as the adverse impacts of prior weather shocks abate and supply constraints gradually ease,” the report stated.

“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 per cent 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 per cent and 3.19 per cent 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-old 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.