The International Monetary Fund (IMF) has projected three percent growth for Nigeria in 2025.
Though this is lower than 3.1 percent growth projection for Nigeria in 2024, it is higher than growth estimates of most emerging markets (EMs), according to the IMF’s latest World Economic Outlook released on Tuesday.
While South Africa’s growth in 2025 is projected at 1.2 percent from 0.9 percent this year, Brazil’s stands at 2.4 percent growth from 2.1 percent in 2024.
Furthermore, the IMF said Mexico will grow by 1.6 percent in 2025 as against 2.2 percent in 2024.
However, India’s projection is higher than Nigeria’s at 6.5 percent in 2025, from 7 percent this year.
Nigeria is embarking on some monetary reforms with the central bank clearing foreign exchange backlog and the federal government removing petrol subsidies.
The country is however facing galloping inflation and rising poverty, which tend to dent the ongoing reforms.
Subsaharan Africa’s growth will rise in 2025 to 4.1 percent, from 3.7 percent in 2024.
According to the report, the global growth outlook is still in line with what was projected in April, but rising inflation may slow down the process of normalising monetary policies in emerging markets.
“At the same time, several central banks in emerging market economies remain cautious about cutting rates owing to external risks triggered by changes in interest rate differentials and associated depreciation of those economies’ currencies against the dollar,” the report said.
The IMF recommended that central banks avoid easing their monetary policy stances too early, to manage inflation risks and preserve economic growth.
“In countries where upside risks to inflation—including those arising through external channels—have materialized, central banks should refrain from easing too early and remain open to further tightening should it become necessary.
Read also: Adequate investment in education will boost Nigeria’s economy — IMF, others
“Where inflation data encouragingly signal a durable return to price stability, monetary policy easing should proceed gradually, which would simultaneously provide room for the required fiscal consolidation to take place. Fiscal slippages over the past year in some countries could require a stance significantly tighter than envisaged,” it said.
