•Predicts harsher times for commodity exporters
By Uche Usim
Following myriads of challenges plaguing Nigeria, the International Monetary Fund (IMF) has recalibrated the country’s 2025 economic growth forecast, saying it is likely to dip to 3.0 per cent from the earlier projection of 3.4 per cent in 2024.
The global lender cited weakening oil supply and escalating global trade tensions as culprits that necessitated the slump.
It also forecast that Nigeria’s headline inflation will average 26.5% in 2025, following the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS).
While it marks a decline from the estimated 33.2% inflation rate in 2024, the IMF projects a renewed surge, with inflation expected to climb to 37.0% in 2026.
The projections, contained in the IMF’s April 2025 World Economic Outlook (WEO) released in Washington DC on Tuesday, offer a sobering assessment of Nigeria’s macroeconomic landscape. The report highlights the fragility of recent gains, warning that despite a brief reprieve, price stability remains out of reach amid ongoing reforms and external economic pressures.
The IMF said the crisis extends to low-income, commodity-dependent economies like Nigeria, warning that their economic outlook has deteriorated amid waning global demand and rising trade tensions.
According to the IMF, revenues in these countries are expected to face intensified pressure as demand from key importing nations continues to falter. Oil-exporting nations, in particular, are bracing for a significant dip in earnings, a trend that is likely to further strain already fragile fiscal frameworks.
“Exporters are set to see weakening oil supply and declining revenues, which will affect fiscal space,” the IMF said in its latest report, noting that the challenges are being exacerbated by persistent market volatility and asset revaluations.
Compounding the risks, the Fund flagged growing concern over the escalating wave of global trade restrictions, particularly the sweeping new tariffs imposed by the United States and retaliatory measures from its trading partners. These disruptions, the IMF warns, are injecting an unprecedented level of uncertainty into the global economy and could have far-reaching consequences.
“Effective tariff rates are now at levels not seen in a century,” said Pierre-Olivier Gourinchas, the IMF’s Chief Economist. “We are entering a new era as the global economic system that has operated for the last 80 years is being reset.”
Against this backdrop of geopolitical and economic turmoil, global growth is expected to remain sluggish. The IMF forecasts that emerging market and developing economies will grow by 3.7 percent in 2025, before inching up marginally to 3.9 percent in 2026. Countries bearing the brunt of the trade disruptions—most notably China—are already seeing their growth projections downgraded significantly.
The story is no different in sub-Saharan Africa, where growth is expected to weaken further. The IMF cautioned that downside risks are rising sharply across the region, especially amid fears of a potential recession in the United States, a development that would ripple through economies with strong trade and financial ties to the U.S.
Meanwhile, the pace of global disinflation appears slower than previously anticipated. Headline inflation is now projected to average 4.3 percent in 2025 and 3.6 percent in 2026. While inflation forecasts in advanced economies have been revised upward, emerging and developing countries are expected to see slightly more moderate price increases than earlier projections suggested.
Central banks, particularly the U.S. Federal Reserve, are now navigating a complex and delicate balancing act. Inflation in the U.S. remains “sticky,” with rates expected to hover around 3 percent. Additional upward pressure on prices is also expected due to the impact of the new tariffs, further complicating monetary policy decisions.
As governments around the world recalibrate their policy priorities in response to shifting economic realities, the IMF emphasised that forecasting has become more difficult and less reliable in today’s rapidly evolving environment.
“The landscape has changed dramatically since the start of the year, and the unfolding of these trade measures is a significant negative shock to global growth,” the Fund said.