By Dipo Olowookere
The International Monetary Fund (IMF) on Tuesday raised the 2022 growth forecast for the Nigerian economy to 2.6 per cent from the previous 2.3 per cent. However, the growth projection for 2021 was left intact at 2.5 per cent.
At its World Economic Outlook Update, the Division Chief of the Research Department at the IMF/Head of the World Economic Studies Division, Mr Malhar Shyam Nabar, stated that the upgrade of the forecast was because of Nigeria’s improvements in terms of trade, noting that 2021 growth was left unchanged because of “opposing developments.”
“In terms of our forecast for Nigeria this year, we have maintained an unchanged forecast of 2.5 per cent and we have upgraded slightly for 2022 to 2.6 per cent,” he said while answering questions from journalists.
“The reason for the unchanged forecast for this year is because it’s a product of opposing developments. We saw activity, as elsewhere, respond a lot stronger than what we had expected earlier in the year.
“But looking out ahead, we think that the uptick in cases in the rest of the continent is going to pose a downside risk factor and is going to drag on growth going forward.
“In terms of our upgrade for 2022, it’s related to the improvements in terms of trade. The oil production that we expect to increase going forward, which will lift growth for 2022.
“It is also predicated on continued improvements in external financial conditions, which have, despite some bouts of volatility recently, have actually been fairly supportive of growth, and it’s important that that continues in order for this growth forecast to pan out,” Mr Nabar explained.
Also, while addressing newsmen at a news conference today, Chief Economist at the IMF, Ms Gita Gopinath, said the organisation’s global growth forecast for this year remains fixed at 6 per cent, though the composition has changed.
She said growth prospects for advanced economies this year have improved by half a percentage point, but this is offset exactly by a downward revision for emerging markets and developing economies, driven by a significant downgrade for emerging Asia.
“For 2022, we project global growth of 4.9 per cent, up from our previous forecast of 4.4 per cent. But again, underlying this is a sizeable upgrade for advanced economies and a more modest one for emerging markets and developing economies,” she said.