The International Monetary Fund (IMF) Tuesday lowered its economic growth forecast for Nigeria as well as other economies in the world, as recession continues to hamper growth in Europe and other advanced economies.
Specifically, the IMF in a report explained that although flood affected growth rates in the oil and non-oil sectors of the Nigerian economy, the country’s Gross Domestic Product (GDP) was expected to grow at 7.2 per cent this year. However, the multilateral institution further lowered its 2014 growth projection for the Nigerian economy to seven per cent, due to its expectation that the economy would encounter slow pace of growth.
The IMF, which ranked Nigeria with the highest growth rate in Africa, observed that: “The main risks to the outlook for sub-Saharan Africa stem from the external environment, although domestic security and political risks should not be discounted.”
The predictions on economic growth came amid President Goodluck Jonathan’s official visit to China for bilateral talks, where the country's economic indices are also characterised by slow economic growth.
According to the Brettonwood Institution, China is expected to see its growth nose dive with figures showing China growth at 7.75 per cent between this year and 2014, with indexes indicating 0.25 per cent in 2013 and 0.5 per cent in 2014.
The new figures by the IMF cut down the world economic growth to 3.1 per cent this year, down from 3.3 per cent in April. The institution also predicted that next year's growth would be pegged at 3.8 per cent, down from four per cent.
According to IMF Economic Counsellor and Director of Research, Oliver Blanchard, the lowering of the growth figures for the global economy was as a result of “appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as by a more protracted recession in the euro area.”
Chief among the reasons for slow growth was linked to poor performance of the BRICS countries where Brazil and South Africa faced daunting challenges owing to downward movement of growth at 2.8 per cent for 2013 and 3.3 per cent for South Africa.
The report also stated growth was expected among countries in developing world in Latin America, Sub-Saharan Africa.
Meanwhile, the IMF readjusted its earlier position, stating that the UK economy would record 0.9 per cent growth, an increase from 0.6 per cent recorded early in the year.
Blanchard observed that: “Britain will grow faster this year than previously expected according to the IMF, in the first major upgrade of the UK’s economic outlook for almost three years".
"The economy will expand by 0.9 per cent compared with the previous forecast of 0.6 per cent,” the IMF said in its quarterly global financial health check.