IMF Makes U-Turn On Nigeria’s Economic Growth, Predicts 4.3% Contraction

The International Monetary Fund (IMF) on Tuesday predicted that Nigeria’s economy will contract by 4.3% this year, reversing its 5.4% projection made in June.

IMF revealed this in its World Economic Outlook report for October 2020.

It had said in April Nigeria’s Gross Domestic Product (GDP) would shrink by 3.4% in 2020.

IMF said Africa’s largest economy will find recovery in 2021, putting the economic growth rate for the year at 1.7 percent.

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Global growth was braking by 4.4 percent in 2020 compared to the 5.2% expected in its outlook released in June.

It noted that the revision revealed a stronger than expected performance of second quarter GDP out-turns mainly in developed countries, where economic activity started to raise sooner than anticipated, after lockdowns were eased.

“Global growth is projected at 5.2 per cent in 2021, a little lower than in the June 2020 WEO Update, reflecting the more moderate downturn projected for 2020 and consistent with expectations of persistent social distancing.

“Following the contraction in 2020 and recovery in 2021, the level of global GDP in 2021 is expected to be a modest 0.6 per cent above that of 2019.

“The growth projections imply wide negative output gaps and elevated unemployment rates this year and in 2021 across both advanced and emerging market economies.

“After the rebound in 2021, global growth is expected to gradually slow to about 3.5 per cent into the medium term,” it stated.

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