The International Monetary Fund (IMF) has revealed that economic growth in Nigeria in 2023 and 2024 is projected to decline gradually due to security issues in the oil sector.
This is contained in the IMF’s latest World Economic Outlook (WEO) Update Report for July 2023: “Near-Term Resilience, Persistent Challenges”, released earlier this week.
The report showed that economic growth in Nigeria is projected at 3.2 per cent in 2023 and decline to 3.0 in 2024.
It said global growth is projected to fall from 3.5 per cent in 2022 to 3.0 per cent in both 2023 and 2024.
The report said though the forecast for 2023 was modestly higher than predicted in the April 2023 WEO, it remained weak by historical standards.
“Compared with projections in the April 2023 WEO, growth has been upgraded by 0.2 percentage points for 2023, with no change for 2024.
“The forecast for 2023–24 remains well below the historical (2000–19) annual average of 3.8 per cent.
“It is also below the historical average across broad income groups, in overall Gross Domestic Product (GDP) as well as per capita GDP terms,” it said.
The report said advanced economies continued to drive the decline in growth from 2022 to 2023, with weaker manufacturing and idiosyncratic factors offsetting stronger services activity.
“For advanced economies, the growth slowdown projected for 2023 remained significant, from 2.7 per cent in 2022 to 1.5 per cent in 2023.
“About 93 per cent of advanced economies are projected to have lower growth in 2023, and growth in 2024 among this group of economies is projected to remain at 1.4 per cent,” the global financial body said.
The report said in emerging markets and developing economies, the growth outlook was broadly stable for 2023 and 2024, although with notable shifts across regions.
The report showed growth in sub-Saharan Africa is projected to decline to 3.5 per cent in 2023 before picking up to 4.1 per cent in 2024.
The report said Global headline inflation was expected to fall from 8.7 per cent in 2022 to 6.8 per cent in 2023 and 5.2 per cent in 2024.
“Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward.
It said inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weather-related events, triggering more restrictive monetary policy.
The report said financial sector turbulence could resume as markets adjust to further policy tightening by central banks.
It, however, said on the upside inflation could fall faster than expected, reducing the need for tight monetary policy, and domestic demand could again prove more resilient.
