- IMF Lowers Nigeria’s Growth Rate for 2019
The International Monetary Fund (IMF) on Monday lowered Nigerian growth projection for 2019, citing the change in oil outlook for the year.
According to the fund, in its World Economic Outlook Update, titled ‘A Weakening Global Expansion,’ growth will drop from 2.3 per cent previously predicted to 2 per cent in 2019.
While, Nigeria’s economy is expected to grow at 2.2 per cent in 2020, down from the 2.5 per cent predicted in October 2018.
Growth in sub-Saharan Africa will grow by 3.5 per cent in 2019 and 3.6 per cent in 2020.
“In sub-Saharan Africa, growth is expected to pick up from 2.9 per cent in 2018 to 3.5 per cent in 2019, and 3.6 per cent in 2020,” the report read in part.
“For both years, the projection is 0.3 percentage point lower than last October’s projection, as softening oil prices have caused downward revisions for Angola and Nigeria.”
Rising interest rates, dollar appreciation, capital outflows and unstable oil prices impedes growth in both emerging and developed economies in 2018.
However, high debt obligations, weak business confidence are some of the factors predicted to weigh on growth in 2019 as businesses and investors look to avert uncertainty ahead of both Brexit negotiation and US-China trade disputes.
Still, the fund noted that nations with well-managed inflation can boost domestic activity with monetary policy.
It said, “Improving the targeting of subsidies and rationalising recurrent expenditures can help preserve capital outlays needed to boost potential growth and social spending to enhance inclusion.”
“For low-income developing countries, concerted efforts in these areas would also help diversify production structures (a pressing imperative for commodity-dependent economies), and their progress toward the UN Sustainable Development Goals.”
Nigeria’s crude oil price was pegged at $60 per barrel in the 2019 proposed budget, same as projected by the IMF.