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IMF foresees a 4.3% contraction in Nigeria’s economy by 2020
By Modupe Shodeinde
The International Monetary Fund in its World Economic Outlook report for October 2020 has projected a contraction in Nigeria’s economy by 4.3% in 2020.
Earlier in April, the IMF had predicted that the economy would contract by 3.4 percent, and it also predicted a 5.4 percent contraction in June.
However, it projected that the economy would recover by 1.7 per cent in 2021.
The report projected global growth to contract by 4.4 per cent in 2020, a less severe contraction than forecasted in the June 2020 World Economic Outlook Update.
This reflected a better second quarter Gross Domestic Product outturns, mostly in advanced economies. Activities in these economies improved sooner than expected after lockdowns were scaled in May and June.
There were also indicators of a stronger recovery in the third quarter.
The report stated that, “Global growth is projected at 5.2 per cent in 2021, a little lower than in the June 2020 WEO Update, reflecting the more moderate downturn projected for 2020 and consistent with expectations of persistent social distancing.
“Following the contraction in 2020 and recovery in 2021, the level of global GDP in 2021 is expected to be a modest 0.6 per cent above that of 2019.
“The growth projections imply wide negative output gaps and elevated unemployment rates this year and in 2021 across both advanced and emerging market economies.
“After the rebound in 2021, global growth is expected to gradually slow to about 3.5 per cent into the medium term.”
The IMF said this implied there would be limited progress towards catching up to the path of economic activity for 2020–25 projected before the pandemic for both advanced and emerging market and developing economies.
