IMF lowers Nigeria’s economic growth to 3%, projects decline in global headline inflation

The International Monetary Fund (IMF) has lowered Nigeria’s economic growth projections for 2024 to 3.0 per cent from the 3.1 per cent it forecasted in October.


This was disclosed by the global lender in its ‘World Economic Outlook Update, January 2024 titled ‘Moderating Inflation and Steady Growth Open Path to Soft Landing’ released on Tuesday, January 30, 2024.

In a table, the IMF estimated that Nigeria’s economy grew by 2.8 per cent, a slight decline from the 2.9 per cent it forecasted in October.

The international lender expects Nigeria’s economy to grow by a percentage point to 3.1 per cent in 2025. Its 2024 projection is a lot less than the 3.76 per cent the country’s government expects in 2024.


The global lender also projected that global headline inflation is expected to fall to 5.8 per cent in 2024, down from the estimated 6.8 percent in 2023.

“Global headline inflation is expected to fall from an estimated 6.8 percent in 2023 (annual average) to 5.8 percent in 2024 and 4.4 percent in 2025. The global forecast is unrevised for 2024 compared with October 2023 projections and revised down by 0.2 percentage point for 2025.

Advanced economies are expected to see faster disinflation, with inflation falling by 2.0 percentage points in 2024 to 2.6 percent, than are emerging market and developing economies, where inflation is projected to decline by just 0.3 percentage point to 8.1 percent” the outlook projected.

In its October update, the IMF stated that Nigeria’s slow growth will be because of weaker oil and gas production.

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At the time, it said, “Growth in Nigeria is projected to decline from 3.3 per cent in 2022 to 2.9 per cent in 2023 and 3.1 per cent in 2024, with negative effects of high inflation on consumption taking hold.

“The forecast for 2023 is revised downward by 0.3 percentage point, reflecting weaker oil and gas production than expected, partially as a result of maintenance work.”

In the third quarter of 2023, Nigeria’s GDP grew by 2.54 per cent year-on-year in real terms according to the National Bureau of Statistics.

In its 2024 prediction for sub-Saharan Africa, the IMF expects the region’s economy to grow by 3.8 per cent.

It said, “In sub-Saharan Africa, growth is projected to rise from an estimated 3.3 per cent in 2023 to 3.8 per cent in 2024 and 4.1 per cent in 2025, as the negative effects of earlier weather shocks subside, and supply issues gradually improve.

“The downward revision for 2024 of 0.2 percentage point from October 2023 mainly reflects a weaker projection for South Africa on account of increasing logistical constraints, including those in the transportation sector, on economic activity.”

Overall global economic growth is projected at 3.1 per cent in 2024 and 3.2 per cent in 2025. 2024’s forecast is 0.2 percentage points higher than what the Washington-based lender projected in its October 2023 World Economic Outlook.

It stated that this expected growth is due to expected resilience in the United States and several large emerging markets and developing economies, as well as fiscal support in China.

It added, “The forecast for 2024–25 is, however, below the historical (2000–19) average of 3.8 per cent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth. Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy.”

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