The International Monetary Fund (IMF) has projected Nigeria’s economy to grow by 3.2% in 2025, accompanied by a reduction in inflation to 25%, according to its latest World Economic Outlook (WEO) report.
The IMF’s forecast reflects a slight improvement in Nigeria’s economic prospects, with the projected GDP growth for 2025 representing a 0.2% increase from its earlier estimate in July 2024. However, for 2024, the IMF downgraded Nigeria’s growth projection to 2.9%, compared to its previous forecast.
On the inflation front, the Washington-based institution anticipates inflation in Nigeria to stabilize at 25% in 2025, with a further decline to 14% by 2029. This represents cautious optimism for Nigeria, which has been grappling with inflationary pressures for the past two years.
Global Economic Outlook and Sub-Saharan Africa’s Performance
Globally, the IMF forecasts economic growth to remain steady at 3.2% in 2025, unchanged from 2024. This marks a slight 0.1% downgrade from its July 2024 projections, highlighting a challenging global environment marked by inflationary pressures and geopolitical uncertainties.
For Sub-Saharan Africa (SSA), the IMF expects the region’s economy to grow by 4.2% in 2025, revised downward by 0.2 percentage points from its earlier April 2024 projection. The report points to climate change-induced weather shocks, supply chain disruptions, and ongoing conflicts as major factors constraining the region’s economic growth. Notably, the South Sudanese economy is expected to contract by 26% due to ongoing internal conflicts.
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“In Sub-Saharan Africa, GDP growth is projected to increase from an estimated 3.6% in 2023 to 4.2% in 2025 as the adverse impacts of prior weather shocks abate and supply constraints gradually ease,” the IMF stated in its report. However, slower-than-expected growth in Nigeria during the first half of 2024 was highlighted as a contributing factor to the region’s revised outlook.
Nigeria’s Economic Performance in 2024
Despite global and regional economic headwinds, Nigeria’s economy showed resilience in the first two quarters of 2024, recording GDP growth rates of 2.98% and 3.19%, respectively. This performance outpaced the previous year’s growth, even as the country faced severe macroeconomic challenges, including surging inflation and a steep depreciation of the Naira.
Nigeria’s inflation rate, which had been on a consistent upward trajectory since January 2023, only began to decelerate in July 2024. However, after a brief pause, inflation surged again following an increase in petrol prices by the Nigerian National Petroleum Corporation Limited (NNPCL) in September 2024.
The IMF’s projections signal cautious optimism for Nigeria’s economic outlook, with key challenges ahead in managing inflation, exchange rate stability, and broader economic reforms. As the country navigates these uncertainties, the 2025 forecast offers hope for modest economic recovery and inflation control.
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