IMF cuts Nigeria’s GDP forecast, says economy to shrink by 5.4%

The International Monetary Fund has downgraded Nigeria’s 2020 growth projection, saying the economy will shrink by 5.4 per cent.

The IMF had in April 2020 projected that the country’s economy would contract by 3.4 per cent this year.

The IMF disclosed this in its overview of the World Economic Outlook for June, titled, ‘A crisis like no other, an uncertain recovery’, which was released on Wednesday.

It stated that, ‘Global growth is projected at –4.9 per cent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook forecast.

The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.

The report said for the first time, all regions were projected to experience negative growth in 2020.

It said there were, however, substantial differences across individual economies, reflecting the evolution of the pandemic and the effectiveness of containment strategies; difference in economic structure; reliance on external financial flows, including remittances; and pre-crisis growth trends.

The IMF, however, increased its projection for 2021 to 2.6 per cent from the initial projection of 0.2 per cent.

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