The International Monetary Fund (IMF) on Tuesday lowered Nigeria’s economic growth rate for 2024 to 2.9%.
In its World Economic Outlook report, the fund lowered its growth forecast for Nigeria, citing insecurity in oil-producing regions, the impact of flooding and weaker-than-expected activity in the first half of the year.
The report was released by Pierre-Olivier Grinchat, the IMF’s research director, and Daniel Lee, director of the IMF.
In April, the IMF predicted Nigeria’s growth rate in 2024 would be 3.3%, but in July it revised the forecast downward to 3.1%.
Weeks of flooding earlier this year killed hundreds of Nigerians, washed away homes and farmland, and further threatened food supplies, especially in the hard-hit northern regions.
According to the National Emergency Management Agency, the main causes of the flooding were poor infrastructure and dams, which killed 185 people and displaced 208,000 people in 28 of Nigeria’s 36 states.
The turmoil in the Niger Delta region has similarly affected oil production, Nigeria’s main source of income.
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global forecast
The report noted that global economic growth is expected to remain stable but overwhelming this year.
“However, there has been a notable revision behind the scenes since April 2024, with an increase in the outlook for the US offsetting a reduction in the outlook for other developed countries, especially Europe’s largest country.
“Similarly, in emerging market and developing countries, conflicts, civil unrest, and extreme weather events are disrupting the production and transportation of primary goods, especially oil, leading to downward revisions to the outlook for the Middle East, Central Asia, and sub-Asia. Connected Sahara Desert Africa.
“These are offset by upward revisions to forecasts for emerging Asia, with demand for semiconductors and electronics surging due to heavy investment in artificial intelligence, and growth trends supported by significant public investment in China and India. Five years from now, global growth should reach 3.1 percent, a mediocre performance compared to pre-pandemic averages.”
Also read: IMF says Nigeria’s 3.1% economic growth outlook depends on stronger reforms
As global disinflation continues, the IMF said service price inflation remains high in many regions, highlighting the importance of understanding sectoral dynamics and adjusting monetary policy.
As cyclical imbalances in the global economy fade, short-term policy priorities need to be carefully adjusted to ensure a smooth landing, he said.
“At the same time, structural reforms are needed to improve medium-term growth prospects, while support for the most vulnerable should be maintained.Chapter 3 explores the social acceptability of these reforms. We will discuss strategies to increase this, the key prerequisites for successful implementation.”
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