IMF upgrades Nigeria’s GDP growth on oil price rally

The International Monetary Fund (IMF) has increased Nigeria’s growth forecast to 2.6 per cent and 2.7 per cent for 2021 and 2022, respectively, amid the rally in oil prices.

The revision was made in the IMF’s October 2021 World Economic Outlook Report, which was released on Tuesday.

The growth forecast for Nigeria was originally pegged at 2.5 per cent in 2021 and 2.6 per cent in 2022 but with oil prices rallying above $80 per barrel on the back of an energy crunch, Nigeria, Africa’s top exporter of the commodity is expected to reap some benefits according to the IMF. A barrel of crude oil sold for $83 Wednesday according to Bloomberg data.

The upgrade comes at a time when the Washington-based lender has downgraded global growth projections for 2021 due to the adverse impact of supply chain disruptions on advanced economies even as the lack of access to Covid-19 vaccines holds back prospects for the emerging economies.

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“Partially offsetting these changes, projections for some commodity exporters have been upgraded on the back of rising commodity prices,” Gita Gopinath, the Economic Counsellor/Director of Research, IMF said.

“Pandemic-related disruptions to contact-intensive sectors have caused the labour market recovery to significantly lag the output recovery in most countries,” Gopinath added.

The global growth projection for 2021 was downgraded by 0.1 percentage points to 5.9 per cent, while the global growth forecast for 2022 remained unchanged at 4.9 per cent.

Gopinath said “Pandemic outbreaks in critical links of global supply chains have resulted in longer-than-expected supply disruptions, further feeding inflation in many countries. Overall, risks to economic prospects have increased, and policy trade-offs have become more complex,” she said.

“The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics,” she added.