IMF cuts Nigeria’s growth projection, says economy doing poorly

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The International Monetary Fund, IMF, has reduced the growth projections made for Nigeria to 1.9 per cent from 2.1 per cent, pointing out that the country’s economy is performing poorly.

Deputy director at IMF’s research department, Gian Maria Milesi-Ferretti,  made this known Tuesday while addressing journalists at the ongoing annual meetings of the IMF and World Bank Group in Bali, Indonesia.

He said  the aggregate growth rate of Africa is being held down by its three largest economies being: Nigeria, South Africa and Angola.

Milesi-Ferretti said, “The aggregate growth rate for the continent is held down by the fact that the three largest economies are not performing up to their full potential.

“Nigeria’s growth, 1.9 per cent this year; 2.3 next year. South Africa, only 0.8 per cent this year. Angola, contracting by 0.1 per cent this year. So the aggregate — over three per cent this year, close to four per cent  next year — is despite the largest economies in the continent doing poorly.

“The continent could do much better once these economies are on a more solid footing, particularly South Africa and Nigeria because they are really large and affect a number of countries in their neighbourhood.”

IMF, had in its World Economic Outlook report released in July this year, projected that Nigeria’s economy would grow by 2.1 per cent in 2018 and 2.3 per cent in 2019.

In the October edition of the report, the Bretton Wood institution cut the growth projections for 2018 to 1.9 percent.

“In Nigeria and Angola, tighter monetary policy and moderation in food price increases contributed to tapering inflation. In Nigeria, inflation is projected to fall to 12.4 percent in 2018, from 16.5 percent in 2017, and to rise to 13.5 percent in 2019,” the report read.

Similarly, the World Bank recently slashed its growth projections for Nigeria  by 0.2 per cent, citing reduction in oil production levels, and contraction in the agricultural sector, following the herder-farmer crisis.

Also speaking at a press briefing on the World Economic Outlook, WEO, in Bali, Indonesia, yesterday, the IMF Economic Counsellor and Director of Research Department, Mr. Maurice Obstfeld said the Fund has cut global growth projection to 3.7 per cent for this year and next year.

The new projection is a marginal reduction of the 3.9 per cent projection of last April’s World Economic Outlook report.

Obstfeld said, “The latest World Economic Outlook report projects that global growth will remain steady over this year and next, at last rate of 3.7 percent.  

“This growth exceeds that achieved in any of the years between 2012 and 2016, and it occurs as many economies have reached or are nearing full employment and as earlier deflation fears have dissipated.

“Thus, policy makers still have an excellent opportunity to build resilience and implement growth-enhancing reforms.

“Last April, at the time of our last World Economic Outlook, the world economy broad-based momentum led us to project a 3.9 per cent growth rate for both this year and next.

“Considering developments since then, however, that number now appears overoptimistic.  Rather than rising, growth has plateaued at 3,7 per cent.”

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