1 week Ago By New Telegraph-Admin
The International Monetary Fund (IMF) has downgraded Nigeria’s growth prospects for 2024, from its projected 3.3 per cent to 2.9 per cent.
But the Fund upgraded its forecast for 2025, raising growth expectations to 3.2 per cent. 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.
These were disclosed in the latest edition of the World Economic Outlook (WEO) report released yesterday, The adjustments in the growth projections, according to the report, reflect concerns over Nigeria’s ongoing macroeconomic challenges, particularly the effects of recent flooding and oil production setbacks. The Washington-based organisation attributed its downward revision to two major factors, agricultural disruptions caused by severe flooding and security and maintenance issues hampering oil production. These challenges, according to Division Chief in the IMF’s Research Department, Jean-Marc Natal, were key drivers of the revision.
“There has been, over the last year and a half, some progress in the region,” he said. “You saw, inflation stabilising in some countries, going down even and reaching a level, close to the target. So, half of them are still at a large distance from the target, and a third of them are still having double-digit inflation.
” In a separate briefing on the Global Financial Stability Report, Assistant Director, Monetary and Capital Markets Departments, Jason Wu, noted that Nigeria’s economy is on a path to stability as a result of the reforms taken by the government. “We recognise that many citizens do face difficulty,” he said. “The flood was quite devastating.
Inflation is still very high, at some 30 per cent so in that regard, the central bank rates is pretty high.” On his part, Economic Counsellor and Director of Research Department, IMF, Pierre-Oliver Gourinchas, harped on the need for governments to strike a balance between curbing inflation and providing necessary support to vulnerable populations. Gourinchas, who used Nigeria as an example, explained: “Fiscal consolidation becomes difficult when governments must also allocate resources for relief efforts, such as responding to flooding or supporting the poor and vulnerable.
” Specifically, he said debt sustainability remains a persistent issue across the region. “Although some progress has been made in controlling debt, it is still too high, and the debt service burden remains significant,” Gourinchas added. Financial Counselor and Director, Monetary and Capital Markets Department, Tobias Adrian, welcomed the inflation targeting regime of the Central Bank of Nigeria (CBN) and the liberalised the exchange rate regime.
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