The International Monetary Fund has increased Nigeria’s growth prospect by 0.1 to 2.6 per cent in 2021 and 2.7 per cent in 2022, despite reducing the rate of global growth prospect due to the COVID-19 Delta variant.
This is according to the October 2021 World Economic Outlook Report, which was released on Tuesday.
In the July 2021 World Economic Outlook, the forecast for Nigeria was at 2.5 per cent in 2021 and 2.6 per cent in 2020.
This suggests an upward review of Nigeria’s growth prospect.
However, in view of the 3.7 per cent 2021 and 2022 growth forecast for Sub-Saharan Africa, Nigeria is 1.1 per cent behind in 2021 and 1 per cent behind in 2022.
Despite the slight positive outlook for Nigeria, the IMF has slightly downgraded global growth projections for 2021.
The projection for 2021 was downgraded by 0.1 percentage points to 5.9 per cent, while the global growth forecast for 2022 remained unchanged at 4.9 per cent.
The IMF justifies this, stating that supply chain disruptions negatively affect recovery in the advanced economies, while lack of access to Covid-19 vaccines holds back prospects for the emerging economies.
In the Forward to the report, the Economic Counsellor and Director of Research at IMF, Gita Gopinath, said that risks to the economy have increased due to the Delta variant, with the pandemic disrupting supply chains and fuelling inflation.
“The momentum has weakened, hobbled by the pandemic. Fueled by the highly transmissible Delta variant, the recorded global recovery continues but the COVID-19 death toll has risen close to 5 million and health risks abound, holding back a full return to normalcy. Pandemic outbreaks in critical links of global supply chains have resulted in longer-than-expected supply disruptions, further feeding inflation in many countries. Overall, risks to economic prospects have increased, and policy trade-offs have become more complex,” she said.
She added, “Compared to our July forecast, the global growth projection for 2021 has been revised down marginally to 5.9 per cent and is unchanged for 2022 at 4.9 per cent. This modest headline revision, however, masks large downgrades for some countries. The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics.
“The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions. Partially offsetting these changes, projections for some commodity exporters have been upgraded on the back of rising commodity prices. Pandemic-related disruptions to contact-intensive sectors have caused the labour market recovery to significantly lag the output recovery in most countries.”
