IMF reviews Nigeria’s growth projection downwards

International Monetary Fund (IMF)
International Monetary Fund (IMF)

The International Monetary Fund (IMF) on Tuesday revised downwards the growth prospects for Nigeria’s economy in 2018 from the previous 2.1 per cent to about 1.9 per cent.

It also projected Nigeria’s inflation rate to rise to an average of 13.5 per cent in 2019.

The Fund gave the projection in a presentation at the ongoing IMF/World Bank annual general meetings in Bali, Indonesia.

In July, the IMF, in its World Economic Outlook report, projected Nigeria’s economy to grow by 2.1 per cent in 2018 and 2.3 per cent in 2019.

After 18 months consecutive drop in the country’s inflation rate from about 15.98 per cent in 2016, the National Bureau of Statistics (NBS) data for August 2018 showed a marginal increase from about 11.14 per cent in July to the current 11.23 per cent.

The IMF’s deputy director, Research, Gian Milesi-Ferretti, blamed the drag on Africa’s economic development and growth on the poor economic development of the largest economies on the continent, including Nigeria.

Mr Milesi-Ferretti noted Nigeria’s (economic) growth of about 1.9 per cent this year to rise to about 2.3 in 2019, with South African economy, currently in technical recession at only 0.8 per cent growth rate this year.

Equally, Angola is at the moment contracting by about 0.1 per cent this year, with a projection of nearly four per cent in 2019.

He said he remained optimistic the continent has prospects to better its current growth rate once these large economies recover from their setback and find their footing.

Out the few biggest economies, Mr Milesi-Ferretti particularly identified the situation in Nigeria and South Africa as capable of having the greatest impact as their sphere of influence affects a number of neighbouring countries due to their size.

In Nigeria, he said inflation rate is projected to drop to about 12.4 per cent in 2018, from 16.5 per cent in 2017, before rising to 13.5 per cent in 2019.

In Angola, inflation is projected to fall to 20.5 per cent in 2018, from 29.8 per cent in 2017, before making its way down to about 15.8 per cent in 2019.

Although the report said the sub-Saharan African economy was recovering from 2.7 per cent in 2017 to an average rate of about 3.1 per cent in 2018 and 3.8 per cent next year.

“Growth performance varies, however, across countries. About half of the expected pickup in growth between 2017 and 2018 reflects the growth rebound in Nigeria.

“Nigeria’s growth is projected to increase from 0.8 per cent in 2017 to 1.9 per cent in 2018 and 2.3 per cent in 2019 (0.4 percentage point higher than in the April 2018), buoyed by the impact of recovering oil production and prices,” he said.

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