International Monetary Fund retains Nigeria's 2020, 2021 growth forecasts at 2.5%

Marco Green
January 21, 2020

Aside from that, despite a sharp slowdown risks lurking over the horizon for the global economic growth, the small East African nation, economy of which depends nearly entirely on agriculture, mining and tourism, had experienced a surprising rise in GDP growth to 11.9 per cent over the third quarter of 2019, up from a 7.7 per cent growth scored at the same time in 2018. The IMF upgraded China's 2020 growth forecast by 0.2 percentage points to 6pc because the U.S. trade deal included a partial tariff reduction and cancelled tariffs on Chinese consumer goods that had been scheduled for December.

In its World Economic Outlook released in Davos, Switzerland, the International Monetary Fund has said, "Domestic demand has slowed more sharply than expected amid stress in the nonbank financial sector and a decline in credit growth".

"After a synchronized slowdown in 2019, we expect a moderate pick up in global growth this year and next".

Eurozone growth also was marked down 0.1pps from October, to 1.3pc for 2020, largely due to a manufacturing contraction in Germany and decelerating domestic demand in Spain. The IMF attributes the lower growth estimates "to a neutral fiscal stance and anticipated waning support from further loosening of financial conditions". And many countries aren't benefiting from the modest upswing in growth. -China trade deal agreement, it wasn't enough to revise the IMF's projections higher compared to last year's forecasts.

"For the emerging market and developing economy group, growth is expected to increase to 4.4 percent in 2020 and 4.6 percent in 2021, from an estimated 3.7 percent in 2019", it noted.

The Fund, had in its regional economic outlook released in October last year, projected that Nigeria will grow 2.3 per cent in 2019 and 2.5 per cent this year.

India-born IMF Chief Economist Gita Gopinath said growth in India slowed sharply owing to stress in the non-bank financial sector and weak rural income growth. Increasing trade tensions between the United States and its European trading partners "could undermine the nascent bottoming out of global manufacturing and trade, leading global growth to fall short of the baseline".

While risks have eased, the International Monetary Fund emphasised that that there's still plenty to worry about especially due to the threat posed to crude oil supply by U.S-Iran face-off, uncertainty over trade talks and social unrest and weather-related disasters. The current price for Brent is $64.23 a barrel, while Dubai is selling at $62.59 and WTI at $57.89, for a simple average of $61.57 a barrel.

Other reports by Click Lancashire

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