The International Monetary Fund (IMF) has projected a 3.4% economic growth for Nigeria in its economic growth review for 2022.
The global output is expected to decline due to the consequences of the crisis in Ukraine.
This was disclosed in IMF’s April World Economic Outlook (WEO) update as part of activities at the ongoing IMF/World Bank spring meeting in Washington.
According to Nairametrics, the Washington based lender reduced the expected global output in 2022 to 3.6% in April down from 4.4% expected in January. These projections are worrisome since global output grew by 6.1% in 2021, a year hunted by the effects of the pandemic.
Nigeria, on the other hand, had an upward review of its economic growth projections. The International Monetary Fund (IMF) has projected the Nigerian economy to grow by 3.4% in 2022, up from 2.7% earlier projected.
The IMF explained that the review was a result of the growing tensions in Europe. It said, “Compared to our January forecast, we have revised our projection for global growth downwards to 3.6 per cent in both 2022 and 2023. This reflects the direct impact of the war on Ukraine and sanctions on Russia, with both countries projected to experience steep contractions.”
This year’s growth outlook for the European Union has been revised downward by 1.1 percentage points due to the indirect effects of the war, making it the second-largest contributor to the overall downward revision.
The IMF added that “The war adds to the series of supply shocks that have struck the global economy in recent years. Like seismic waves, its effects will propagate far and wide—through commodity markets, trade, and financial linkages.”
However, the IMF gave an upward review of Nigeria’s economic growth projection due to the benefits the country would derive from surging oil prices.
It said, “The medium-term outlook is revised downwards for all groups, except commodity exporters who benefit from the surge in energy and food prices.”
Also, the IMF upgraded its economic growth forecast for the Sub-Saharan African region to 3.8 per cent in 2022, representing a 0.1 percentage point increase from the 3.7 per cent forecast made in January.
“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 weigh 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.″
