IMF Reviews Nigeria’s Growth Upwards To 2.1%
The International Monetary Fund, IMF, has effected an upwards review of Nigeria’s economic growth rate projection to 2.1 percent, a second review by the Bretton Woods institution on the forecast this year alone.
Earlier in January it had reviewed the statistics downwards to 2.0 percent from initial figure of 2.3 percent referencing challenges in the international oil prices.
But oil prices have been stabilizing since February this year.
The positive forecast was also made against the backdrop of similar upwards review on the oil producers and other sub-Sahara Africa economies in 2019 to 2.0 percent (from 1.3 percent in 2018) and 3.5 percent (from 3.0 percent in 2018) respectively.
These were contained in the 2019 “World Economic Outlook”, report of the IMF released Tuesday at the ongoing 2019 Spring World Bank /IMF meeting in Washington DC, United States of America, USA. But in a near conflicting position, the Chief Economist & Director of Research, IMF, Gita Gopinath, at a press briefing on the report also yesterday said: “ Nigeria is likely going to experience a weakening in economic growth in the year 2019 following continued weakness of the global expansion.”
She also stated that IMF has projected a further 3.7 percent expansion for the Sub Saharan Africa region in 2020 while that of Nigeria was projected at 2.5 percent.
Trade tension could crash oil prices However, Gopinath said that a continued trade tension between the US and China would have a negative impact on oil prices and other commodities.
Responding to a question on the impact of the trade tension on Sub-Saharan Africa, the IMF Chief stated: “A continued trade tension between the US and China would further weaken the global economy and this will in turn have a negative impact on prices of commodities, including oil.
“With this weakness expected to persist into the first half of 2019, our new World Economic Outlook (WEO) projects a slowdown in growth in 2019 for 70 percent of the world economy.
Global growth softened to 3.6 percent in 2018 and is projected to decline further to 3.3 percent in 2019.
The downward revision in growth of 0.2 percentage points for 2019 from the January projection is also broad based.”
Commenting on emerging markets, Gopinath said: “ Emerging markets have experienced some resumption in portfolio flows, a decline in sovereign borrowing costs, and a strengthening of their currencies relative to the US dollar.
While the improvement in financial markets has been rapid, those in the real economy have been slow to materialize.
Measures of industrial production and investment remain weak for now in many advanced and emerging market economies, and global trade has yet to recover.
“With improved prospects for the second half of 2019, global growth in 2020 is projected to return to 3.6 percent.
This recovery is precarious and predicated on a rebound in emerging market and developing economies, where growth is projected to increase from 4.4 percent in 2019 to 4.8 percent in 2020.
Specifically, it relies on an expected rebound in growth in Argentina and Turkey and some improvement in a set of other stressed developing economies, and is therefore subject to considerable uncertainty.
Growth in advanced economies will slow slightly in 2020, despite a partial recovery in the euro area, as the impact of US fiscal stimulus fades and growth tends toward the modest potential for the group, given aging trends and low productivity growth.”
She said: “Beyond 2020, global growth is expected to stabilize at around 3½ percent, bolstered mainly by growth in China and India and their increasing weights in world income. Growth in emerging market and developing economies will stabilize at 5 percent, though with considerable variance as emerging Asia continues to grow faster than other regions.
A similar pattern holds for low-income countries with some, particularly commodity importers, growing rapidly but others falling further behind the advanced world in per capita terms.
