The International Monetary Fund (IMF) has revised its economic growth forecast for Nigeria, with a significant reduction to 2.35% from the Federal Government's projected rate of 3.75%. The downward revision, announced during its annual meetings in Marrakesh, Morocco, is attributed to high inflation and economic shocks. This occurs despite President Tinubu's reforms, such as ending fuel subsidies and unifying exchange rates.
Analysts from Wyoming Capital and Partners, as well as FSL Securities Limited, have expressed their agreement with the IMF's revised forecast. However, Highcap Securities Limited has cautioned about potential GDP underperformance. In response to the decade-high inflation rate of 25.8%, the IMF has urged the Central Bank of Nigeria to further increase its Monetary Policy Rate from the current 18.75%.
Looking forward, the IMF predicts a slight improvement in Nigeria's GDP growth rate to 2.9% in 2024 while maintaining a global economic growth forecast of 3.0%.
In related news, the IMF has dismissed criticisms from the UK government concerning its recent forecast that places the UK at the tail end of G7 economies - Germany, France, the US, Italy, Canada and Japan. The organization projects a meager growth rate of 0.6% for the UK in 2024.
The IMF also anticipates that the UK will grapple with the highest inflation rates among developed countries in 2024 due to stringent monetary policies and escalating energy prices. Pierre Olivier Gourinchas, IMF's Chief Economist, defends this forecast as an honest interpretation of data and points out that it even surpasses next year's Bank of England growth estimate.
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