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Nigeria’s economy ‘limping along’, says IMF, cuts 2023 growth forecast to 2.9 percent

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Economic hardship: Manufacturers grapple with unsold, expired goods

Nigeria’s economy growth forecast has been reduced from 3.3 percent to 2.9 percent in 2023 and 3.1 in 2024 respectively, with negative effects of high inflation on consumption taking hold.

The cut is contained in the World Economic Outlook released at the Annual Meeting of the IMF/World in Marrakesh, Morocco.

The growth forecast for 2023 is revised downward by 0.3 percentage points, reflecting weaker oil and gas production than expected, partially due to maintenance work.

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The World Bank, it would be recalled, had cut Nigeria’s 2022 growth forecast to 3.1% from a previous forecast of 3.8% in 2022.

In its last Nigeria Development Update (NDU), launched in Abuja, the World Bank said that the nation had to make hard choices or face a worse economic downturn in the months and years ahead.

Since his swearing in on May 29, President Bola Tinubu had introduced several economic measures, including the removal of fuel subsidy.

He also floated the exchange rate in line with the age-long recommendation of the IMF and World Bank, a decision that has seen the rate tumble to over N1,000 to the dollar, and energy prices increased by four folds from N144 to N620, impacting an already worsening inflation scenario

The baseline forecast is for global growth to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical (2000–19) average of 3.8 percent.

Advanced economies are expected to slow from 2.6 percent in 2022 to 1.5 percent in 2023 and 1.4 percent in 2024 as policy tightening starts to bite.

Emerging market and developing economies are projected to have a modest decline in growth from 4.1 percent in 2022 to 4.0 percent in both 2023 and 2024.

Global inflation is forecast to decline steadily, from 8.7 percent in 2022 to 6.9 percent in 2023 and 5.8 percent in 2024, due to tighter monetary policy aided by lower international commodity prices.

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