IMF projects Nigeria’s economy to ‘recover’ to pre-COVID-19 level by 2022

The International Monetary Fund (IMF) said on Friday said Nigeria’s economic output would recover to its pre-COVID-19 level by 2022.

The IMF said in a statement, the conclusion was the outcome of research conducted on the country’s economy from October 30 to November 17.

The team, according to the fund, concluded that under current policies, the outlook in Nigeria was challenging.

It said: “The real Gross Domestic Product is projected to contract by 3¼ percent in 2020. The recovery is projected to start in 2021, with subdued growth of 1½ percent and output recovering to its pre-pandemic level only in 2022.

“Despite an expected easing of food prices, inflation is projected to remain in double-digits and above the Central Bank of Nigeria’s target range, absent monetary policy reforms.”

The IMF added that following a significant decline in revenue collections from levels that were already among the lowest in the world, fiscal deficits were projected to remain elevated in the medium term.

READ ALSO: ‘Nigeria on path of growth’, Lawan tells IMF

The Bretton Woods institution said there were significant downside risks to this near-term outlook arising from the uncertain course of the pandemic both globally and in Nigeria.

The IMF also observed that the COVID-19 pandemic was exacting a heavy toll on the Nigerian economy, which was already experiencing falling per capita income and double-digit inflation with limited buffers and structural bottlenecks.

It said real GDP was contracting, inflation increasing, and external vulnerabilities remained large.

“Low oil prices and sharp capital outflows have significantly increased balance of payments pressures and, together with the pandemic-related lockdown, have led to a large output contraction and increased unemployment.

“Supply shortages have pushed up headline inflation to a 30-month high,” the IMF concluded.

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