Nigeria’s economic growth projection of 3.4% for 2022 stands—IMF

International Monetary Fund (IMF) has said that its projection of 3.4 per cent growth for the Nigeria economy remains unchanged. The multilateral Financial institution said this in its World Economic Outlook (WEO) for July 2022, titled “gloomy and more uncertain”. The IMF lowered its global growth forecast and raised its inflation outlook due to recent resurgent of the Covid-19 pandemic and the Ukraine-Russia war that has dealt a blow on global economy. In its updated forecast, the IMF expects global growth of 3.2 per cent this year, 0.4 percentage points less than what was projected in April.

For the eurozone, the IMF expects growth to be 0.2 This year, the IMF expects an inflation rate of 6.6 per cent in the industrialised countries and 9.5 per cent in emerging markets, upward revisions of 0.9 and 0.8 percentage points, respectively. The IMF said the new assessments are due to “higher-than-expected inflation worldwide especially in the United States and major European economies’’. This it said, triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine.’’

It warned that, with increasing prices continuing to squeeze living standards worldwide, taming inflation should be the first priority for policymakers. “Tighter monetary policy will inevitably have real economic costs, but delay will only exacerbate them,’’ it said. In the United States, the economy growth was revised down to 2.3 per cent amid reduced household purchasing power and the central bank’s moves to hike interest rates. In China, COVID-19 outbreaks and lockdowns, as well as a further escalation of the property sector crisis, could further suppress growth, which was revised down by 1.1 percentage points to 3.3 per cent Meanwhile, China’s slowdown would have major global consequences, it warned.

However, the IMF added that policies to address specific impacts on energy and food prices “should focus on those most affected without distorting prices.’’ It also called on nations to raise COVID-19 vaccination rates in view of future new variants. According to the report, mitigating climate change continues to require “urgent multilateral action to limit emissions and raise investments to hasten the green transition’’.