IMF reverses forecast for Nigeria’s economy to -4.3% in 2020 … Projects 1.7% growth for 2021
The International Monetary Fund, IMF, Tuesday reversed Nigeria’s economy growth projection to -4.3 per cent in 2020 as against the earlier 5.4 per cent growth rate.
The Fund also projected that Nigeria’s economy would grow by 1.7 per cent in 2021 from its projected growth rate of 2.6 per cent.
Recall that the Fund had in July this year projectedthat the country’s Gross Domestic Product GDP would experience a more serious contraction of 5.4 per cent as against the former 3.4 per cent earlier projected in April 2020 due to the negative effects of the economic lockdown occasioned by the outbreak of the coronavirus.
Director, African Department of the Fund, Abebe Aemro Selassie, said Nigeria’s crude oil exports would further experience slide even as the impact of the pandemic would compound the situation due to the sharp decline in oil prices.
“We are projecting GDP growth to contract by about five per cent in Nigeria this year, so very significant that it will hit incomes.”
In its latest Economic outlook released Tuesday, the IMF also projected the world economy to fall by -4.4 per cent in 2020, an upward guide from an earlier predicted rate of -4.9 per cent made in June, while it projected the world economy would grow by 5.2 per cent in 2021.
These projections expect that social distancing due to the COVID-19 pandemic will continue into 2021, but the transmission of the virus will plunge globally by the end of 2022. READ ALSO: IMF downgrades world growth, warns of ‘precarious’ 2020
“We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast,” the IMF’s Chief Economist, Gita Gopinath, had said in the latest World Economic Outlook. She added that the revision was driven by better-than-expected growth in advanced economies such as China during the second quarter of the year and signs of a more rapid recovery in the third quarter.
In our latest World Economic Outlook released on Tuesday, Gopinath said: “We continue to project a deep recession in 2020. Global growth is projected to be -4.4 per cent, an upward revision of 0.8 per centage points compared to our June update. “This upgrade owes to somewhat less dire outcomes in the second quarter, as well as signs of a stronger recovery in the third quarter, offset partly by downgrades in some emerging and developing economies. In 2021 growth is projected to rebound to 5.2 per cent, which implies 0.2 per cent points below our June projection.” The Fund said : “Except for China, where output is expected to exceed 2019 levels this year, output in both advanced economies and emerging markets and developing economies is projected to remain below 2019 levels even next year. Countries that rely more on contact intensive services and oil exporters face weaker recoveries compared to manufacturing-led economies.
“The divergence in income prospects between advanced economies and emerging and developing economies (excluding China) triggered by this pandemic is projected to worsen. “We are upgrading our forecast for advanced economies for 2020 to -5.8 per cent, followed by a rebound in growth to 3.9 per cent in 2021.
“For emerging market and developing countries (excluding China) we have a downgrade with growth projected to be 5.7 per cent in 2020 and then a recovery to 5 per cent in 2021. “With this, the cumulative growth in per capita income for emerging-market and developing economies (excluding China) over 2020-21 is projected to be lower than that for advanced economies.”