IMF Raises Nigeria’s 2025 Economic Growth Forecast to 3.4%

The International Monetary Fund (IMF)

The International Monetary Fund (IMF) has revised Nigeria’s economic growth projection upward, forecasting a 3.4% GDP growth rate for 2025. This marks a notable upgrade from its earlier forecast of 3.0% released in April 2025, signaling renewed optimism for the country’s economic trajectory despite persistent global headwinds.

In its July 2025 World Economic Outlook (WEO), the IMF also raised Nigeria’s 2026 growth outlook to 3.2%, up from the previous estimate of 2.7%. The improved forecast reflects a modest but important shift in confidence toward Nigeria’s ability to navigate economic challenges and implement key structural reforms.

Beyond Nigeria, the IMF upgraded global economic growth forecasts as well projecting 3.0% growth for 2025 (up 0.2 percentage points from April), and 3.1% for 2026 (up 0.1 percentage points). The Sub-Saharan Africa region also saw an upward revision, with growth now forecast at 4.0% in 2025 and 4.3% in 2026, both modest increases that highlight the region’s resilience and potential.

“Growth is expected to be relatively stable in 2025 in sub-Saharan Africa at 4.0 percent, before picking up to 4.3 percent in 2026,” the IMF stated.

IMF Chief Economist Pierre-Olivier Gourinchas attributed the improved outlook to several global economic developments, including:

• Front-loaded economic activity that surpassed earlier expectations

• Easier financial conditions, bolstered by a weaker U.S. dollar

• Fiscal expansions in key economies

• Lower global tariffs and easing of trade tensions in certain regions

However, Gourinchas cautioned that the global economic environment remains fragile. “Risks remain tilted to the downside,”

he said, emphasizing the potential threats from renewed protectionism, unresolved geopolitical tensions, and fiscal vulnerabilities in several countries.

The IMF noted that while global conditions have improved, the path forward is far from risk-free. Some of the major concerns include:

• Breakdowns in trade negotiations

• Surging inflation due to supply disruptions or currency pressures

• Investment uncertainty driven by political instability or policy reversals

• Geopolitical conflicts and financial system fragility

• Potential tightening of financial conditions, particularly if central bank independence is undermined

To sustain growth momentum, the IMF urges policymakers especially in developing economies like Nigeria to focus on:

• Reducing policy uncertainty, particularly in trade and fiscal matters

• Restoring fiscal buffers despite rising spending demands

• Maintaining central bank independence to ensure monetary and financial stability

• Allowing exchange rate flexibility, with selective interventions as needed

• Implementing structural reforms that support productivity and long-term resilience

“Clear, transparent, and predictable economic rules are essential to investor confidence and long-term prosperity,” Gourinchas emphasized.

The IMF’s revised forecast offers a positive signal for Nigeria’s economic recovery, following years of economic shocks caused by global commodity volatility, foreign exchange instability, and domestic policy inconsistencies. With inflation remaining high and pressure mounting on the naira, Nigeria’s government faces a critical window to enact credible reforms, including:

• Tax and revenue diversification

• Subsidy realignment

• Infrastructure investment

• Support for export-oriented sectors like agriculture and tech

If effectively implemented, these reforms could not only solidify the forecasted growth trajectory but also build economic resilience for the long term.

The IMF’s latest World Economic Outlook suggests that Nigeria’s economic future is cautiously optimistic but only if policymakers act decisively to stabilize the macroeconomic environment and foster a climate of confidence, reform, and inclusive growth.

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