The International Monetary Fund in its January World Economic Outlook has predicted a growth rate of 2.7 percent for Nigeria in 2022.
The institution made the forecast in the summit titled “Rising Caseloads, a Disrupted Recovery, and Higher Inflation” released in Washington. The growth projection is 0.1 percent higher than the 2.6 percent IMF’s forecast in October 2021.
It projects Sub-Saharan Africa’s growth to be 3.7 per cent in 2022 and 4.0 per cent in 2023, while Nigeria’s economy is expected to grow by 2.7 per cent in 2022 and 2023.
“As the new Omicron COVID-19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging markets and developing economies.
“The ongoing retrenchment of China’s real estate sector and slower-than-expected recovery of private consumption also have limited growth prospects.”
However, IMF said that the global Gross Domestic Product growth is expected to moderate from 5.9 percent in 2021 to 4.4 percent in 2022.
According to it, the reversal is half a percentage point lower than what it predicted in the October WEO, largely reflecting forecast markdowns in the two largest economies (USA and China), adding that the global economy enters 2022 in a weaker position than previously expected.
The report also said that global growth was expected to slow to 3.8 per cent in 2023.
According to the IMF, although this is 0.2 percentage point higher than in the previous forecast, the upgrade largely reflects a mechanical pickup after current drags on growth dissipate in the second half of 2022.
The forecast is conditional on adverse health outcomes declining to low levels in most countries by end-2022, assuming vaccination rates improve worldwide and therapies become more effective.
It also said that the emergence of a new variant was not the only risk that had crystallized in recent months, but that inflation continued to rise throughout the second half of 2021, driven by several factors of varying importance across regions.
“Fossil fuel prices have almost doubled in the past year, driving up energy costs and causing higher inflation, most prominently in Europe. Rising food prices have contributed to higher inflation, for example in sub-Saharan Africa.
“Elevated inflation is expected to persist for longer than envisioned in the October WEO, with ongoing supply chain disruptions and high energy prices continuing in 2022.
“Assuming inflation expectations stay well anchored, inflation should gradually decrease as supply-demand imbalances wane in 2022 and monetary policy in major economies responds.”
“In this context, international cooperation will be essential to preserve access to liquidity and expedite orderly debt restructurings where needed. Investing in climate policies remains imperative to reduce the risk of catastrophic climate change.”