IMF Forecasts Nigeria’s Inflation Rate to Decline to 23% by 2025
Written by Deborah Oyinloye on April 17, 2024
At the recent International Monetary Fund/World Bank Spring Meetings in Washington D.C., the IMF unveiled its Global Economic Outlook, presenting insights into Nigeria’s economic trajectory, particularly regarding inflation rates.
Daniel Leigh, Division Chief of the IMF Research Department, highlighted Nigeria’s economic reforms, including exchange rate adjustments, which have contributed to a surge in inflation, reaching 33.2 percent in March.
Projected data suggests Nigeria’s inflation rate will decrease to 23 percent next year and further to 18 percent in 2026, signalling a significant shift from previous forecasts.
This positive outlook is attributed to Nigeria’s economic growth, expected to rise from 2.9 percent in the previous year to 3.3 percent in the current year. Factors contributing to this expansion include recovery in the oil sector, enhanced security measures, advancements in agriculture due to favourable weather conditions and the adoption of dry-season farming.
Leigh also noted a notable increase in Nigeria’s financial and IT sectors, contributing to the overall economic landscape.
Despite inflationary pressures, Leigh emphasized the IMF’s projection of a 26 percent inflation rate for the current year. However, he expressed confidence that tight monetary policies and substantial interest rate increases implemented in February and March would help control inflation.
Pierre Olivier Gourinchas, an official of the IMF Research Department, addressed global economic trends, highlighting rising oil prices and persistently high services inflation in many countries. He underscored the importance of bringing inflation back to target levels and cautioned against the risks posed by geo-economic fragmentation to global growth prospects.
Gourinchas stressed the necessity of preserving improvements in monetary, fiscal, and financial policy frameworks, particularly for emerging market economies, to uphold a resilient global financial system and prevent a permanent resurgence in inflation.
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Author: Deborah Oyinloye
With an interest in media, Deborah aims to impart the lives of people positively.
