During the recent International Monetary Fund/World Bank Spring Meetings in Washington D.C., the IMF released its Global Economic Outlook, providing projections for Nigeria’s economy. Apexnewsgh reports
The report highlighted a significant shift in inflation rates, specifically mentioning the impact of Nigeria’s economic reforms, including exchange rate adjustments, which have led to a surge in inflation rate to 33.2 percent in March.
According to data from the National Bureau of Statistics, Nigeria’s inflation rate increased to 33.2 percent, with the food inflation rate rising to over 40 percent in the first quarter of 2024. The Division Chief of the IMF Research Department, Daniel Leigh, stated that they see inflation declining to 23 percent next year and then to 18 percent by 2026.
The IMF official also noted an improvement in Nigeria’s economic growth, which is expected to rise from 2.9 percent last year to 3.3 percent this year. This growth is attributed to the recovery in the oil sector, improved security, advancements in agriculture due to better weather conditions, and the introduction of dry season farming. Additionally, there has been a broad-based increase in Nigeria’s financial and IT sectors.
Leigh further elaborated on the reasons behind the increase in inflation, mentioning the impact of reforms, exchange rates, and import pass-through into other goods. The IMF revised its inflation projection for the current year to 26 percent, with expectations that tight monetary policies and significant interest rate increases during February and March will help to curb inflation.
A warning was issued by IMF Research Department official Pierre Olivier Gourinchas regarding the risks posed by geo-economic fragmentation to global growth prospects and the need for careful calibration of monetary policy. Despite Nigeria missing its inflation target of six to nine percent for over a decade, Gourinchas stressed the importance of bringing inflation back to target as a priority.
In conclusion, it was emphasized that preserving improvements in monetary, fiscal, and financial policy frameworks, particularly for emerging market economies, is crucial to maintain a resilient global financial system and prevent a permanent resurgence in inflation.
Source: Apexnewsgh.com
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