Nigeria’s economy is expected to contract by 4.3 percent in 2020 from 2.2 percent in 2019 and later recover with a growth rate of 1.7 percent in 2021 according to the International Monetary Fund (IMF).
The IMF on Tuesday released its World Economic Outlook (WEO), which also projects 13.7 percent inflation rate for Nigeria in 2020 and 11.6 percent in 2021.
Olalekan Aworinde, public sector economic lecturer, Babcock University, said the contraction as projected by IMF is as a result of Covid-19 pandemic, which has stalled economic activities.
He also pointed out infrastructural deficit as another factor that inhibits growth. Aworinde said on phone that institutional framework that ought to regulate economic activities are lacking and that also hinder growth. “Corruption will continue to hamper growth,” he said.
On the positive growth expected by 2021, he said it could be that the institutional framework is going to be in place and also some of the government spending may propel growth.
Aworinde also mentioned the 2021 budget released by the Federal Government few days ago and the Nigeria’s Central Bank’s plan to give out loan as part of growth drivers in 2021 as projected by IMF.
Global growth is projected at −4.4 percent in 2020, a less severe contraction than forecast in the June 2020 World Economic Outlook (WEO) Update. The revision reflects better-than anticipated second quarter GDP outturns, mostly in advanced economies, where activity began to improve sooner than expected after lockdowns were scaled back in May and June, as well as indicators of a stronger recovery in the third quarter.
Global growth is projected at 5.2 percent in 2021, a little lower than in the June 2020 WEO Update, reflecting the more moderate downturn projected for 2020 and consistent with expectations of persistent social distancing.
Following the contraction in 2020 and recovery in 2021, the level of global GDP in 2021 is expected to be a modest 0.6 percent above that of 2019. The growth projections imply wide negative output gaps and elevated unemployment rates this year and in 2021 across both advanced and emerging market economies.
Regional differences remain stark, with many countries in Latin America severely affected by the pandemic facing very deep downturns, and large output declines expected for many countries in the Middle East and Central Asia region and oil-exporting countries in sub-Saharan Africa affected by low oil prices, civil strife, or economic crises.
Growth for emerging market and developing economies excluding China is projected at –5.7 percent for 2020 and 5 percent for 2021. The projected rebound in 2021 is not sufficient to regain the 2019 level of activity by next year. Growth among low-income developing countries is projected at –1.2 percent in 2020, strengthening to 4.9 percent in 2021.
Higher population growth and low starting levels of income imply that even this more modest contraction compared with most emerging market economies will take a very heavy toll on living standards, especially for the poor.
The global economy is climbing out from the depths to which it had plummeted during the Great Lockdown in April. But with the COVID-19 pandemic continuing to spread, many countries have slowed reopening and some are reinstating partial lockdowns to protect susceptible populations. While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks.
