Home Business Nigeria’s 2021 growth prospect to increase by 2.6% – IMF

Nigeria’s 2021 growth prospect to increase by 2.6% – IMF

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The International Monetary Fund (IMF)has increased Nigeria`s growth prospect to 2.6 per cent and 2.7 per cent for 2021 and 2022, respectively, despite the reduced rate of global growth prospect due to the COVID-19 Delta variant.

On Tuesday, the October 2021 World Economic Outlook Report, revealed that the growth forecast for Nigeria was originally set at 2.5 per cent in 2021 and 2.6 per cent in 2022.

Nigeria is, however, 1.1 per cent behind in 2021 and one per cent behind in 2022, this is in line with the 3.7 per cent 2021 and 2022 growth forecast for subSaharan Africa

The forecast for 2021 was lowered by 0.1 percentage point to 5.9 per cent, while the global growth forecast for 2022 was unchanged at 4.9 per cent.

The IMF justifies this by saying that supply chain disruptions have negatively impacted the recovery in advanced economies, while lack of access to Covid19 vaccines has hurt prospects for emerging economies.

IMF Economic Counsellor/Director of Research Gita Gopinath said the delta variant increased risks to the economy as the pandemic disrupted supply chains and increased inflation.

She said, “The momentum has weakened, hobbled by the pandemic. Fuelled by the highly transmissible Delta variant, the recorded global recovery continues but the COVID-19 death toll has risen close to five million and health risks abound, holding back a full return to normalcy.

“Pandemic outbreaks in critical links of global supply chains have resulted in longer-than-expected supply disruptions, further feeding inflation in many countries. Overall, risks to economic prospects have increased, and policy trade-offs have become more complex.”

Gopinath added that the outlook for the group of low-income developing countries has deteriorated significantly due to the worsening dynamics of the pandemic.

She said the downgrade also reflected more difficult short-term prospects for the advanced economies group, in part due to supply disruptions.

“Partially offsetting these changes, projections for some commodity exporters have been upgraded on the back of rising commodity prices. Pandemic-related disruptions to contact-intensive sectors have caused the labour market recovery to significantly lag the output recovery in most countries,” Gopinath added.

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