The International Monetary Fund (IMF) has revised its economic growth forecast for Nigeria in 2024 downward to 3.1 percent, a 0.2 percentage point reduction from its earlier projection of 3.3 percent.
This adjustment comes as Nigeria struggles with soaring inflation rates and weaker-than-expected economic performance in the first quarter of 2024.
The revised forecast was unveiled in the IMF’s July 2024 World Economic Outlook report released on Tuesday. The IMF cited Nigeria’s underwhelming Gross Domestic Product (GDP) growth in Q1 2024 as the primary reason for the downgrade.
The IMF report stated, “The forecast for growth in sub-Saharan Africa is revised downward, mainly as a result of a 0.2 percentage point downward revision to the growth outlook in Nigeria amid weaker than expected activity in the first quarter of this year.”
Data from the National Bureau of Statistics (NBS) corroborates this assessment, showing that Nigeria’s GDP growth dropped quarter-on-quarter to 2.98 percent in Q1 2024 from 3.46 percent in Q4 2023.
The IMF’s revised outlook for Nigeria has had a ripple effect on its forecast for Sub-Saharan Africa as a whole. The region’s economic growth projection for 2024 has been lowered to 3.7 percent from the previous estimate of 3.8 percent in April. However, the IMF has slightly raised its forecast for the region’s growth in 2025 to 4.1 percent from 4.0 percent.
Despite these regional adjustments, the IMF maintained its global economic growth forecasts at 3.2 percent for 2024 and 3.3 percent for 2025.
The downgrade in Nigeria’s growth forecast coincides with the country’s escalating inflation crisis. According to the latest NBS data, Nigeria’s inflation rate surged to a new high of 34.19 percent in June 2024, marking a 0.24 percent increase from May 2024.
The NBS reported in its Consumer Price Index (CPI) release on Monday., “In June 2024, the headline inflation rate increased to 34.19% relative to the May 2024 headline inflation rate which was 33.95%,”
The NBS attributes this surge to rising prices across various sectors, particularly in food items. The food inflation rate for June 2024 stood at 2.55 percent on a month-on-month basis, showing a 0.26 percent increase from May 2024.
