IMF downgrades forecast for Nigeria’s economic recovery in 2021

The International Monetary Fund (IMF) has downgraded forecasts for Nigeria’s recovery in 2021 to 1.5 percent, 0.2 percent lower from its earlier projection of 1.7 percent made in October 2020.

IMF however retained its 2.5 projection growth for Nigeria in 2022.

The IMF made the new projection known in its World Economic Outlook (WEO).

The new report, titled ‘Policy Support and Vaccines Expected to Lift Activity,’ said even though the recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves, and new variants of the virus pose concerns for the outlook.

For Africa, IMF, projected that in sub-Saharan Africa, growth will strengthen to 3.2 percent in 2021 and 3.9 percent in 2022.

“Amid exceptional uncertainty, the global economy is projected to grow 5.5 percent in 2021 and 4.2 percent in 2022,” it said.

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“The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.

“The projected growth recovery this year follows a severe the collapse in 2020 that has had acute adverse impacts on women, youth, the poor, the informally employed, and those who work in contact-intensive sectors. The global growth contraction for 2020 is estimated at -3.5 percent, 0.9 percentage point higher than projected in the previous forecast (reflecting stronger-than-expected momentum in the second half of 2020).”

The IMF noted that the strength of the recovery is projected to vary significantly across countries, depending on access to medical interventions, the effectiveness of policy support, exposure to cross-country spillovers, and structural characteristics entering the crisis.

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