The World Bank has retained its Gross Domestic Product (GDP) growth forecast for Nigeria this year at 3.5 per cent, as projected in June last year.
The Bank, which stated this in its Global Economic Prospects January 2025 report released on Thursday, also maintained its GDP growth forecast for the country next year at 3.7 per cent.
Specifically, the report said: “Growth in Nigeria is forecast to strengthen to an average of 3.6 per cent a year in 2025-26. Following monetary policy tightening in 2024, inflation is projected to gradually decline, boosting consumption and supporting growth in the services sector, which continues to be the main driver of growth.
Oil production is expected to increase over the forecast period but remains below the OPEC quota. The baseline forecast implies that per capita income growth will remain weak over the forecast horizon.”
The report further said that growth in Nigeria increased to an estimated 3.3 per cent in 2024, mainly driven by services sector activity, particularly in financial and telecommunication services, adding that “macroeconomic and fiscal reforms helped improve business confidence.”
On the outlook for Sub-Saharan Africa (SSA), the report said that growth in the region is expected to strengthen to 4.1 per cent in 2025 and 4.3 per cent in 2026, “as financial conditions ease alongside further declines in inflation.”
“Following weaker-than-expected regional growth last year, growth projections for 2025 have been revised upward by 0.2 percentage points, and for 2026 by 0.3 percentage points, with improvements seen across various subgroups. At the country level, projected growth has been upgraded for nearly half of SSA economies in both 2025 and 2026,” it added.
The report, however, stated that growth rates in the region’s largest two economies(Nigeria and South Africa) will continue to lag behind those of the rest of the region, despite the projected growth pickups in both countries.
On risks to the outlook which are “tilted to the downside,” the report said: “Global growth could be weaker than projected on account of heightened uncertainty and the potential for adverse changes in trade policies.
“Further downside risks include a sharper-than-expected economic slowdown in China; escalating global geopolitical tensions, especially an intensification of the conflict in the Middle East; and worsening political instability and an escalation of violent conflicts in the region, especially in East Africa and the Sahel.”
In addition, the report warned that: “More persistent inflation than expected could keep global interest rates elevated, compounding the challenges confronting highly indebted countries, while greater frequency and intensity of adverse weather events could exacerbate poverty in many countries across SSA.”
According to the report, while global growth is expected to hold steady at 2.7 per cent in 2025-26, it “appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters.”
In his forward for the report, Senior Vice President and Chief Economist at the World Bank Group, Indermit Gill, stated that while the Bank forecasts the global economy to expand by 2.7 per cent this year and next—the same rate as in 2024, “that’s below the 3.1 per cent average that prevailed in the decade before COVID-19.”
Gill, however, said that this growth rate, “could be accompanied by some welcome trends: an expected decline in both inflation and interest rates.”
“In a time of exceptionally high global policy uncertainty, however, developing economies would be wise to take nothing for granted. Far better to redouble the effort to take control of their own destiny,” he stated
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