The International Monetary Fund (IMF) has revised its projection for Nigeria’s gross domestic product (GDP) projection downwards to a negative 5.4 percent.
This is worse than the -3.4 percent contraction published in the April World Economic Outlook report.
In the World Economic Outlook update released on Tuesday, the Bretton Wood institution projected that the global economy will suffer a deeper contraction of 4.9 percent, even more than the earlier projected 3 percent.
Economies across the world have been badly affected by the COVID-19 pandemic which resulted in lockdown, travel restrictions and a drop in crude oil prices.
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“Our projection for sub-Saharan Africa overall is a negative 3.2 percent in 2020 with a recovery in 2021 of 3.4 percent,” Gita Gopinath, IMF chief economist and director of the research department.
“This is a significant downward revision and we have some very large negative growth forecast for instance for South Africa, its -8 percent for Nigeria, its -5.4 percent. So these economies are being hit very hard.
“We should also keep in mind that this is not just a reduction of the growth rate but for many countries that are starting out at lower per capita income levels when you have a growth hit of 3 percentage points, the distress that it causes in peoples lives is in a bigger magnitude than a similar decline for an advanced economy so these are very difficult times.”
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In its April WEO report, the IMF said Nigeria’s economy is headed for its worst recession in 30 years and the second recession in five years.
It is projected that the economy will rebound by 2.6 percent in 2021.
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