Nigeria’s economic growth will slow to 3% in 2023 — IMF
The International Monetary Fund, IMF, has predicted that Nigeria’s economic growth will slow to 3.0% in 2023, while the inflation rate will drop to 17%.
Making the projections in the IMF’s October World Economic Outlook, released on the sidelines of the IMF and World Bank’s ongoing annual meetings in Washington DC, the Monetary Fund called for fiscal policies that also support current efforts by central banks to curb inflation. such as protecting the vulnerable population from inflation.
According to the IMF, Nigeria is expected to register gross domestic product, GDP, growth of 3.2% in 2022 and 3.0% in 2023, which is 0.2 percentage points lower than the 3.4% and 3.2% respectively projected in July. WEO.
The IMF, however, forecast Nigeria’s inflation rate to drop to 19% in 2022 and 17% in 2023.
Speaking at the October WEO press conference held on the sidelines of the ongoing IMF and World Bank Annual Meetings, in Washington DC, Daniel Leigh, Division Chief, Research Department, IMF, said that Lower inflation rate projections for Nigeria are based on the recent hike in the monetary policy rate, MPR by the Central Bank of Nigeria, CBN, as well as the global decline in crude oil and food prices.
He said: “For Nigeria, in particular, we expect inflation to be around 19% this year, but then some moderation next year up to 17%, and part of that reflects monetary policy actions. which is the 4.0% point. increase in the Central Bank of Nigeria as well as the decline we expect in global oil and food prices.
Pierre-Olivier Gourinchas, Director of Research at the IMF, advised the CBN and its global peers on the choice of monetary instruments needed to curb the rate of inflation.
Nigeria’s GDP growth projections were in line with the lower growth rate predicted by the IMF for the global economy in 2023.
While the IMF, in the October WEO, maintained its growth forecast for the world economy in 2022 at 3.2%, it however lowered its forecast for 2023 to 2.7%, or 0.2 points. percentage lower than the July forecast.
Explaining the basis for its weaker growth forecast for the global economy, the IMF said: “The global economy continues to face daunting challenges, shaped by the Russian invasion of Ukraine, a cost of living caused by persistent and growing inflationary pressures, and the slowdown in China.
He said: “First, fiscal policy should not run counter to the efforts of monetary authorities. To do otherwise will only prolong inflation into severe financial instability, as recent events have reminded us.
“Fiscal policy should rather aim to protect the most vulnerable and targeted and temporary constraints. Third, fiscal policy can help economies adapt to more volatile environments by investing in productive capacity, human capital, digitalization, green energy and supply chain diversification will make economies more resilient in the next crisis Unfortunately, these important principles do not always guide policy at this time.
