IMF projects 4.4% growth for Nigeria economy in 2026

International Monetary Fund IMF, has projected in its January 2026 World Economic outlook that Nigeria economy will grow by 4.4 per cent as against the 4.2 per cent growth in in 2025 a difference of 0.02 per cent.

It said that Sub-Saharan Africa is projected to grow by 4.6%, with Nigeria (4.4%) benefiting from reform momentum and services-sector expansion.

In the Middle East, Saudi Arabia (4.5%) reflects diversification efforts and normalization in the oil sector.

It said that Emerging market and developing economies continue to drive global growth.

China (4.5%) reflects a moderated but stable expansion consistent with structural rebalancing, while India (6.4%) remains the fastest-growing major economy, underpinned by strong domestic demand and investment.

Global economic activity is projected to remain resilient in 2026, with world output growth at 3.3%, easing marginally to 3.2% in 2027.

The outlook reflects a global economy that is steady amid divergent forces, as technology investment, accommodative financial conditions, and private-sector adaptability continue to offset headwinds from trade policy uncertainty and geopolitical tensions.
 
Growth across advanced economies remains modest but stable. The United States is projected to expand by 2.4%, supported by easing financial conditions and productivity gains linked to technology adoption.

The Euro Area records gradual improvement Germany (1.1%), France (1.0%), and the United Kingdom (1.3%) though structural constraints and weak investment continue to limit growth potential. Japan (0.7%) remains weighed down by demographic and demand-side pressures.

The report said the forecast marked a small upward revision for 2026 and no change for 2027 compared with that in the October 2025 WEO.
According to the report, this steady performance on the surface results from the balancing of divergent forces.

“Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions,” the report revealed.

The report also cited monetary support, broadly accommodative financial conditions, and adaptability of the private sector. It said global headline inflation was expected to decline from an estimated 4.1 per cent in 2025 to 3.8 per cent in 2026 and further to 3.4 per cent in 2027.

“The inflation projections are also broadly unchanged from those in October and envisage inflation returning to target more gradually in the United States than in other large economies,” it said.

The report said that, among advanced economies, growth was projected at 1.8 per cent in 2026 and 1.7 per cent in 2027. For emerging markets and developing economies, it projected growth will continue to hover just above 4.0 per cent in 2026 and 2027.
It projected growth in the Middle East and Central Asia to accelerate from 3.7 per cent in 2025 to 3.9 per cent in 2026. The report projected 4.0 per cent accelerated growth in 2027, supported by higher oil output, resilient local demand, and ongoing reforms.

The report said that for Sub-Saharan Africa, growth was expected to also accelerate from 4.4 per cent in 2025 to 4.6 per cent in 2026 and 2027.
It said the region’s growth would be supported by macroeconomic stabilisation and reform efforts in key economies.

For Nigeria, the report said growth was projected at 4.4 per cent in 2026 and would drop to 4.1 per cent in 2027. “In Latin America and the Caribbean, growth is expected to moderate to 2.2 per cent in 2026 and bounce to 2.7 per cent in 2027 as countries in the region approach potential from different cyclical positions.

“In emerging and developing Europe, a sharp slowdown in 2025 to a growth rate of 2.0 per cent is expected to reverse. Economies in the region will expand at an average rate of 2.3 per cent in 2026 and 2.4 per cent in 2027,” it said.

The report said that risks to the outlook remained tilted to the downside, which were revaluation of technology expectations and escalation of geopolitical tensions.

On the upside, the report said that activity could be further lifted by AI-related investment and eventually transform into sustainable growth if faster AI adoption translates into strong productivity gains and increased business dynamism.

Activity could also be supported by a sustained easing in trade tensions.
The reports recommended that policymakers should restore fiscal buffers, preserve price and financial stability, reduce uncertainty, and implement structural reforms without further delay.