The International Monetary Fund (IMF) has adjusted Nigeria’s economic growth projection for 2023, lowering it by 0.3 percentage points to 2.9% due to a decrease in oil and gas production.
This announcement was made in the IMF’s latest World Economic Outlook for October, titled ‘Navigating Global Divergences,’ which was released on Tuesday.
Previously, in July, the IMF had anticipated a growth rate of 3.2% for Nigeria’s economy in 2023.
Nigeria’s economic outlook
At that time, it had pointed out that the country’s growth would be affected by security challenges in the oil sector.
Elaborating on the revised prediction for Nigeria, the IMF, headquartered in Washington, stated, “Growth in Nigeria is expected to decline from 3.3% in 2022 to 2.9% in 2023 and 3.1% in 2024, primarily due to the adverse impact of high inflation on consumption.”
The IMF’s adjustment for 2023 is attributed to weaker-than-expected oil and gas production, partially resulting from maintenance work.
According to data from the National Bureau of Statistics, Nigeria’s GDP expanded by 2.51% in the second quarter of 2023.
The IMF also mentioned that growth in the sub-Saharan African region is projected to decrease to 3.3% in 2023 due to worsening weather-related challenges, a global economic slowdown, and domestic supply issues.
However, it anticipates a rebound in growth to 4.0% in 2024, although this would still be below the region’s historical average of 4.8%.
On a global scale, the IMF anticipates a deceleration in economic growth from 3.5% in 2022 to 3.0% in 2023 and further to 2.9% in 2024, notably below the historical average of 3.8% (2000–19).
The IMF explained, “Advanced economies are expected to slow from 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024 as policy tightening begins to have an impact.
Emerging market and developing economies are projected to experience a modest decline in growth from 4.1% in 2022 to 4.0% in both 2023 and 2024.”
Regarding inflation, which has been a global concern, the IMF expects it to decrease from 8.7% in 2022 to 6.9% in 2023 and further to 5.8% in 2024.