IMF Revises Nigeria’s Economic Outlook, Projects 4.3% GDP Contraction

Nigeria’s economy will experience a less severe contraction  of 4.3 per cent in 2020, a new projection from the International Monetary Fund has shown.

The new report on World Economic Outlook  released on Tuesday revised the earlier 5.4 per cent contraction projected in June by 1.1 per cent.

The reversal follows the country’s easing of the lockdown and re-opening of most sectors of the economy, as well as the recovery of global oil prices.

The lender however downgraded the country’s 2021 GDP to grow by 1.7 per cent, after projecting in June this year that the economy will rebound by 2.6 per cent next year.

It said, “We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast,” IMF’s Chief Economist, Gita Gopinath said in the report.

The IMF also projected global growth to fall by 4.4 per cent in 2020, which is a less severe contraction than the 4.9 contraction forecast in the June 2020 World Economic Outlook.

It said, “The revision reflects better-than anticipated second quarter GDP out-turns, mostly in advanced economies, where activity began to improve sooner than expected after lockdowns were scaled back in May and June, as well as indicators of a stronger recovery in the third quarter.”

IMF also sees global growth in 2021 to surge  5.2 percent, which is a little lower than the projection in June 2020.

The IMF said, “Following the contraction in 2020 and recovery in 2021, the level of global GDP in 2021 is expected to be a modest 0.6 percent above that of 2019.

“This implies that both advanced and emerging market and developing economies will only modestly progress toward the 2020–25 path of economic activity projected before the COVID-19 pandemic.”