IMF raises Nigeria’s economic growth forecast to 3.4%

The global economy is expected to grow by 3.6 percent in 2022 and 2023 as a result of the war on Ukraine, and sanctions on Russia.

International Monetary Fund (IMF)

The International Monetary Fund, IMF, has raised its forecast for Nigeria’s economic growth in 2022 to 3.4%, citing an increase in crude oil prices.

However, the IMF reduced its projection for global growth to 3.6% in both 2022 and 2023, citing the impact of the costly humanitarian crisis economic damage from the Russian war on Ukraine.

The IMF disclosed this in its ‘World Economic Outlook: War Sets Back the Global Recovery, April 2022,’ report.

This increase is also owed to the global increase in oil prices as a result of the war.

In its January report, the Washington-based lender predicted a growth rate of 2.7 percent for Nigeria in 2022. But it has adjusted its projection based on increasing oil prices.

In its latest forecast, the revealed a 3.1% growth projection for the nation in 2023, down from 3.4% in 2022 and 3.6% in 2021.

Similarly, the IMF upgraded its economic growth forecast for the Sub-Saharan African region to 3.8 percent in 2022, representing a 0.1 percentage point increase from the 3.7 percent forecast made in January.

The IMF said: “In sub-Saharan Africa, food prices are also the most important channel of transmission, although in slightly different ways. Wheat is a less important part of the diet, but food, in general, is a larger share of consumption.

Higher food prices will hurt consumers’ purchasing power—particularly among low-income households—and weigh on domestic demand. Social and political turmoil, most notably in West Africa, also weighs on the outlook.

The increase in oil prices has however lifted growth prospects for the region’s oil exporters, such as Nigeria. Overall, growth in sub-Saharan Africa is projected at 3.8 percent in 2022.

According to the Washington-based lender, the global economy is expected to grow by 3.6 percent in 2022 and 2023 as a result of the war on Ukraine, and sanctions on Russia.

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