The International Monetary Fund (IMF) projects the global economy to grow 3% this year, this remains below the average growth for two decades before the coronavirus pandemic and devoid of the impact of the conflict which has just begun between Israel and Palestine.
The outlook typically reflects fears of continuing inflation and high interest rates.
The baseline forecast for growth shows a decline from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024. Advanced economies are expected to slow from 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024 as policy tightening starts to bite.
The fund projects that emerging markets and developing economies would see a modest decline in growth from 4.1% in 2022 to 4% in 2023 and 2024.
Sub-Saharan Africa has been downgraded slightly, now projected to grow by 3.3% in 2023 and 4% in 2024 from a 4% growth in 2022.
Growth in Nigeria the IMF projects will slow down to 2.9% this year and inch up to 3.1% in 2024. The growth rate for 2022 was 3.3%.
Pierre-Oliver Gourinchas, IMF’s Chief Economist says the growth for Sub-Saharan Africa, though more than that of developed economies, is sub-optimal.
Demonetisation, high inflation, shocks to agriculture and hydrocarbon output coupled with external headwinds are responsible for the downgrade of Nigeria.
President Tinubu has moved in quickly with important reforms says Daniel Leigh, head of the IMF’s Research Department by ending fuel subsidiaries and unifying the official exchange rate. “We welcome these initial reforms because we see them as paving the way towards a stronger and inclusive growth”, he said.
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