The International Monetary Fund (IMF) has retained its 3.2 per cent forecast for Nigeria’s economic growth in 2023, as it lowered its forecast for Sub-Saharan economic growth in 2023 by 0.1 percentage point to 3.5 per cent.
This was disclosed in the IMF World Economic Outlook, WEO Update, July, titled ‘Near-Term Resilience, Persistent Challenges’ it, however, raised its forecast for global economic growth in 2023 by 0.2 percentage points to 3.5 per cent.
The IMF said, “Global growth is projected to fall from 3.5 per cent in 2022 to 3.0 per cent in both 2023 and 2024 on an annual average basis. Compared with projections in the April 2023 WEO, growth has been upgraded by 0.2 percentage points for 2023, with no change for 2024.
“The forecast for 2023–24 remains well below the historical (2000–19) annual average of 3.8 per cent. It is also below the historical average across broad income groups, in overall GDP as well as per capita GDP terms.
“Advanced economies continue to drive the decline in growth from 2022 to 2023, with weaker manufacturing, as well as idiosyncratic factors, offsetting stronger services activity. In emerging markets and developing economies, the growth outlook is broadly stable for 2023 and 2024, although with notable shifts across regions.
“On a year-over-year basis, global growth bottomed out in the fourth quarter of 2022. However, in some major economies, it is not expected to bottom out before the second half of 2023.
“In sub-Saharan Africa, growth is projected to decline to 3.5 percent in 2023 before picking up to 4.1 per cent in 2024. Growth in Nigeria in 2023 and 2024 is projected to gradually decline, in line with April projections, reflecting security issues in the oil sector.
“In South Africa, growth is expected to decline to 0.3 per cent in 2023, with the decline reflecting power shortages, although the forecast has been revised upward by 0.2 percentage point since the April 2023 WEO, on account of resilience in services activity in the first quarter.”
In its advice to governments on policy priorities, the IMF said, “In most economies, the priority remains achieving sustained disinflation while ensuring financial stability.
“Therefore, central banks should remain focused on restoring price stability and strengthening financial supervision and risk monitoring. Should market strains materialize, countries should provide liquidity promptly while mitigating the possibility of moral hazard.
“They should also build fiscal buffers, with the composition of fiscal adjustment ensuring targeted support for the most vulnerable. Improvements to the supply side of the economy would facilitate fiscal consolidation and a smoother decline of inflation toward target levels.”