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IMF Forecasts 2.1% Growth For Nigeria, Oil Price Slump

The International Monetary Fund (IMF) on Tuesday projected that the Nigerian economy would grow from 0.8 per cent in 2017 to 2.1 per cent by the end 2018 and by 1.9 per cent in 2019.

This is even as the Fund cautioned of possible crash in crude oil prices in the near future.

While giving these forecasts in the latest World Economic Outlook (WEO) Report launched in Washington D.C, USA, the IMF also advised oil-dependent economies, including Nigeria, to intensify economic diversification as a strategic and proactive response to the crash of crude oil prices.

The report stated” “Some low-income countries like Mozambique and Nigeria have experienced financial stress or deteriorating loan quality in recent years as growth has moderated and corporate balance sheets have weakened.

“Further deterioration in loan quality would impair credit intermediation and ability of the banking sector to support growth, which would raise the risk of cost re-capitalisation and severely burden the already strained public finances”, it added.

On the global economic growth projection for this year, the Fund’s Director of Research, Mr. Maurice Obstfeld, during the World Economic Outlook press conference, said that the global economy would grow by 3.9 per cent in 2018.

Obstfeld hinged the projection on the continued strong performance in the Euro area, Japan, China and the United States.

He said: “Despite the good near-term news, longer-term prospects are more sobering. Advanced economies are far facing aging population, falling rates of labour force and low productivity growth.

“Emerging and developing economies present a diverse picture. Many of these countries need to diversify their economies to boost future growth and resilience’’, the researcher added.

On the current global financial situations Obstfeld explained that the condition remained loose, despite the approach of higher monetary policy interest rates and further worsening the build-up of asset-market vulnerabilities.

Specifically, he noted that the recent escalating tension over trade between the United States and China presented a growing risk for global financial stability.

Obstfeld clarified: “The prospect of trade restrictions and counter-restrictions threatens to undermine confidence and derail global growth prematurely.

“While some governments are pursuing substantial economic reforms, trade disputes risk diverting others from the constructive steps they would need to take now to improve and secure growth prospects,’’ he said.

The Breton Woods institution urged national governments to advance growth by resolving issues of climate change, infectious diseases, cyber-security, corporate taxation and corruption, among others.

It would be recalled that the World Bank had predicted that Nigeria will record at least 2.5 percent economic growth this year also puts the global economic growth at 3.1 per cent for the year.

In its January 2018 Global Economic Prospect Report launched in Washington DC, projected that the country’s Gross Domestic Product (GDP) next year and year 2020 would grow by 2.8 per cent.

“Nigeria is anticipated to accelerate to a 2.5 per cent rate this year from one per cent growth in the year just ended. An upward revision to Nigeria’s forecast is based on expectation that oil production will continue to recover and that reforms will lift non-oil sector growth”, the bank projected.

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