Predictably, there are tough days ahead as the International Monetary Fund (IMF) projects that Nigerian’s Gross Domestic Product (GDP) would tank by -5.4 per cent in the curret fiscal year (year 2020)
This is against its earlier – 3.4 per cent decline in GDPprediction in April this year.
However, the global financial institution said Nigeria’s economy will see a rebound of 2.6per cent in 2021 suggesting an increase of 200 basis points when compared to the 2.4 per cent April projection for 2021.
The Washington based lender made these projections yesterday during the unveiling of the June 2020 World Economic Outlook.
Nigeria faces economic distress not only from the coronavirus outbreak, but also from a sharp fall in crude oil prices.
The Federal Government has said it expects the economy to contract by 3.4per cent this year. In May, however, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said the economy could shrink by as much as 8.9per cent this year in a worst-case scenario.
Meanwhile, the cost of living in Nigeria has risen steadily. Annual inflation rose for the ninth straight month in May, to a two-year high of 12.4 per cent.
On the global economy in 2020 and 2021, the IMF predicted a decline of 4.9 per cent and 3.0 per cent respectively, representing a 3.0 per cent contraction in 2020 and a recovery of 2.2 per cent in 2021.
According to the IMF, compared to our April World Economic Outlook forecast, “we are now projecting a deeper recession in 2020 and a slower recovery in 2021.”
This forecast, the report said, “assumes that financial conditions-which have eased following the release of the April 2020 WEO, will remain broadly at current levels.
Alternative outcomes to those in the baseline are clearly possible and not just because of how the pandemic is evolving.”
IMF said it is “projecting a synchronised deep downturn in 2020 for both advanced economies and emerging markets and developing economies.”
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.”
