The International Monetary Fund (IMF) has updated its outlook for Nigeria’s economic growth, forecasting a 3.4% increase in real Gross Domestic Product (GDP) for 2025.
Gatekeepers News reports that this projection follows the conclusion of the IMF Executive Board’s 2025 Article IV Consultation with Nigeria, a periodic review of the country’s economic policies and performance.
Earlier, on April 22, the IMF had estimated Nigeria’s economy would grow by 3% in 2025, slightly down from the 3.2% it forecasted in October 2024.
In a statement released Wednesday, IMF said inflation is expected to decline gradually over the medium term, attributing the trend to sustained tight macroeconomic measures and an expected easing in retail fuel prices.
According to the Fund, Nigeria has implemented significant reforms over the past two years that have helped stabilise the macroeconomic environment and boost resilience.
It said, “ The Nigerian authorities have implemented major reforms over the past two years which have improved macroeconomic stability and enhanced resilience.”
“The authorities have removed costly fuel subsidies, stopped monetary financing of the fiscal deficit and improved the functioning of the foreign exchange market.”
“Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows. At the same time, poverty and food insecurity have risen, and the government is now focused on raising growth.”
“Growth accelerated to 3.4 percent in 2024, driven mainly by increased hydrocarbon output and vibrant services sector. Agriculture remained subdued, owing to security challenges and sliding productivity.”
“Real GDP is expected to expand by 3.4 percent in 2025, supported by the new domestic refinery, higher oil production and robust services. Against a complex and uncertain external environment, medium-term growth is projected to hover around 31⁄2 percent, supported by domestic reform gains.”
“Gross and net international reserves increased in 2024, with a strong current account surplus and improved portfolio inflows. Reforms to the fx market and foreign exchange interventions have brought stability to the naira.”
“Naira stabilization and improvements in food production brought inflation to 23.7 percent year-on-year in April 2025 from 31 percent annual average in 2024 in the backcasted rebased CPI index released by the Nigerian Bureau of Statistics. Inflation should decline further in the medium-term with continued tight macroeconomic policies and a projected easing of retail fuel prices.”
“Fiscal performance improved in 2024. Revenues benefited from naira depreciation, enhanced revenue administration and higher grants, which more-than-offset rising interest and overheads spending.”
“Downside risks have increased with heightened global uncertainty.”
“A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability and exacerbate exchange rate pressures.”
The Fund also warned that worsening security conditions could hinder growth and worsen food insecurity.
