IMF projects stronger Economic Recovery for Nigeria, others

April 7, 2021
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bY MARK ITSIBOR, Abuja

The International Monetary Fund (IMF) has projected a stronger economic recovery in 2021 for Nigeria and Sub-Saharan Africa.

In a report it released yesterday, IMF projected that the Nigerian economy is likely to grow to 2.5 per cent, against its earlier projection of 1.5 per cent it announced in January of 2021.

Nigeria’s economy exited recession in the last quarter of 2020 through a 0.11 per cent gross domestic product (GDP) growth.

In its new World Economic Outlook update that was released yesterday, IMF said it expected the global economy to grow by 6 per cent in 2021, up from its 5.5% forecast in January. Looking further ahead, global GDP for 2022 is seen increasing by 4.4 per cent, higher than the 4.2 per cent earlier estimated.

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The organisation based its new projects on increasing COVID-19 vaccine rollouts. It however warned  of daunting challenges, based on the different rates of administering the vaccines across the globe.

“Even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible,” IMF chief economist Gita Gopinath said in the Economic Outlook report.

Gopinath said the outlook presents daunting challenges related to divergences in the speed of recovery both across and within countries and the potential for persistent economic damage from the crisis.

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On the other hand, the IMF estimated growth of 5.1 per cent for advanced economies for 2021 was revised to be at 6.4 per cent.

According to the new economic forecast, emerging and developing economies’ growth would be at 6.7 per cent for 2021, with India expected to expand by as much as 12.5 per cent.

Gopinath said lower levels of female employment was also exacerbating disparities in emerging economies.

“Within-country income inequality will likely increase because young workers and those with relatively lower skills remain more heavily affected in not only advanced but also emerging markets and developing economies,” he said.

The Fund said higher debt service costs are also expected to constrain the ability of most emerging economies to address social needs and reduce poverty and growing inequality,adding that about 95 million people are likely to fall below the extreme poverty threshold during 2020–21 period.

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