IMF Cuts Nigeria’s GDP Growth Forecast

  
 The International Monetary Fund (IMF) has forecast a four per cent growth rate for Nigeria’s Gross Domestic Product (GDP) in 2015, as the country continues to contend with the challenge of declining income from the drop in crude oil prices.The latest growth forecast by the fund is 2.25 percentage points lower than its last year’s projection for Nigeria.As stated by the multilateral agency in its 208-page World Economic Outlook (WEO) titled, “Adjusting to Lower Commodity Prices”.

  In the 2015 budget, the federal government had initially forecast a real GDP growth rate of 6.4 per cent in 2015 but was forced to slash it to 5.5 per cent owing to declining oil prices.Oil accounts for the bulk of government revenue in Nigeria, but global crude prices have more than halved over the past one year.Continuing, the IMF stated that it anticipated growth in sub-Saharan Africa to also slow this year to 3.8 per cent, from five per cent in 2014.Similarly, it forecast that growth in low-income developing countries would also fall to 4.8 per cent this year, more than one percentage point weaker than in 2014, before picking up to 5.8 per cent in 2016.

But the IMF pointed out that its projections for the low-income countries would be shaped by the outlook for sub-Saharan economies, “in particular Nigeria; the resilient growth in low-income developing countries in Asia, particularly Bangladesh and Vietnam.”

“The slowdown in 2015 is primarily driven by the repercussions of declining commodity prices, particularly those for oil, as well as lower demand from China—the largest single trade partner of sub-Saharan Africa—and the tightening of global financial conditions for the region’s frontier market economies.