IMF Outlook Sees Nigeria’s GDP Growing By 2.5% In 2020

IMF Outlook Sees Nigeria’s GDP Growing By 2.5% In 2020


Post Views: 160 The International Monetary Fund (IMF), on Tuesday published its World Economic Outlook (WEO) 2019 at the ongoing Spring Meeting of the...

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The International Monetary Fund (IMF), on Tuesday published its World Economic Outlook (WEO) 2019 at the ongoing Spring Meeting of the World Bank Group, showing that Nigeria’s Gross Domestic Products (GDP) could grow by 2.5% in 2020.
The growth is forecast to come faster than the 1.9% and 2.1% for 2018 and this year, which is a far cry from the 3.7% projection for Sub-Saharan Africa, up from this year’s 3.5%.
This is also coming exactly one week after the IMF released its latest Article IV report for Nigeria, saying the country’s economy is growing slower than population growth and far below its potential to reduce poverty or joblessness (READ MORE).
More specifically, Nigeria’s growth is seen coming higher than the 2.0% and 2.6% forecast for oil exporters; but a far cry from that of fellow oil exporter- Angola at 2.9%, a significant rise from just 0.4%, which itself was an improvement on the -1.7% growth recorded in 2018.
Gabon at 3.1% and 3.9% for 2019 and 2020 is projected to grow faster than Nigeria; just as Chad with 4.5% and thereafter, 6.0% for both years, from 3.1% last year.
For the Republic of Congo, growth is expected to rise first from 0.8% in 2018 to 5.4%, before plummeting to just 1.5% next year; same as South Africa, which is forecast to inch from 0.8% last year, to 1.2% this year, before crawling to 1.5% in 2020
Ghana, Nigeria’s fellow West African country, is also seen recording robust GDP growth of 8.8% this year, up from 5.6% in 2018 and then slowdown to 5.8% by 2020; just as Cote d’Ivoire, whose economy is forecast to growth at 7.5% this year, from 7.4% last year, after which it would decline to 7.2% by 2020.
Ethiopia’s GDP is seen growing by 7.7% this year, just like in 2018 and then slip to 7.5% growth by 2020; while Senegal economy is projected to grow by 7.5% next year from 6.9% this year and 6.2% in 2018.
In the foreword to the report titled: “WEO: Growth slowdown, precarious recovery,” Gita Gopinath, the IMF’s Economic Counsellor, sees the weakness that began in 2018 persisting into the first half of 2019, following which it “projects a decline in growth in 2019 for 70% of the global economy.”
“Global growth, which peaked at close to 4 percent in 2017, softened to 3.6% in 2018, and is projected to decline further to 3.3% in 2019. Although a 3.3% global expansion is still reasonable, the outlook for many countries is very challenging, with considerable uncertainties in the short term, especially as advanced economy growth rates converge toward their modest long-term potential.
“While 2019 started out on a weak footing, a pickup is expected in the second half of the year. This pickup is supported by significant policy accommodation by major economies, made possible by the absence of inflationary pressures despite closing output gaps,” Gopinath, noted.
It is imperative, Gopinath continued, that governments avoid costly policy mistakes, while policymakers must cooperate to “ensure that policy uncertainty doesn’t weaken investment.
“Fiscal policy will need to manage trade-offs between supporting demand and ensuring that public debt remains on a sustainable path, and the optimal mix will depend on country-specific circumstances. Financial sector policies must address vulnerabilities proactively by deploying macroprudential tools. Low-income commodity exporters should diversify away from commodities given the subdued outlook for commodity prices.”
The IMF chief also called for monetary policy based on data is well communicated, while ensuring “that inflation expectations remain anchored.”