The International Monetary Fund (IMF) has revised upward its growth forecast for the Nigerian economy in 2021 from one per cent it had predicted in January to 2.5 per cent.
IMF, in its latest World Economic Outlook titled: “Managing Divergent Recoveries,” that was released yesterday, however, expects a 2.3 per cent economic growth for the country in 2022.
For Sub-Saharan Africa generally, the IMF also anticipated growth of 3.4 per cent this year, higher than its earlier forecast of 0.2 per cent.
“The pandemic continues to exact a large toll on Sub-Saharan Africa (especially, for example, Ghana, Kenya, Nigeria, South Africa). Following the largest contraction ever for the region (1.9 per cent in 2020), growth is expected to rebound to 3.4 per cent in 2021, significantly lower than the trend anticipated before the pandemic. Tourism-reliant economies will likely be the most affected,” the IMF said.
It stated that some countries have continued to observe high and volatile inflation and may be limited in the monetary accommodation they can provide without risking destabilising inflation.
“Rapidly rising food prices have already lifted headline inflation rates in some regions, including sub-Saharan Africa and Asia,” it added.
According to the Washington-based institution, global prospects remain uncertain a year into the pandemic.
It said new virus mutations and the accumulating human toll raised concerns, even as growing vaccine coverage lifted sentiments.
The IMF said economic recoveries were diverging across countries and sectors, reflecting variation in pandemic-induced disruptions and the extent of policy support.
It added: “The outlook depends not just on the outcome of the battle between the virus and vaccines—it also hinges on how effectively economic policies deployed under high uncertainty can limit lasting damage from this unprecedented crisis.
“Global growth is projected at six per cent in 2021, moderating to 4.4 per cent in 2022. The projections for 2021 and 2022 are stronger than in October 2020 WEO. The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility.
“High uncertainty surrounds this outlook, related to the path of the pandemic, the effectiveness of policy support to provide a bridge to vaccine-powered the normalisation, and the evolution of financial conditions.”