Nigeria’s economy is expected to grow by 3.4 per cent this year but slow to 3.2 per cent next year, the International Monetary Fund (IMF) has said.

In its World Economic Outlook Update released yesterday, the IMF also projected sub-Saharan Africa to grow by four per cent this year while improving to 4.3 per cent next year.

The above three per cent projection is a vote of confidence in the country’s economic reforms.

The continued global uncertainties associated with the tariff wars and geopolitical tensions could further
exacerbate supply chain disruption and exert pressure on the prices of imported items, the IMF report said.

The report forecasts global growth of 3.0 per cent for 2025 and 3.1 per cent in 2026.

The forecast for 2025 is 0.2 per cent higher than the reference forecast of April 2025 and 0.1 per cent higher for 2026.

The report noted that this reflects stronger-than-expected front-loading in anticipation of higher tariffs, lower average effective U.S. tariff rates than those announced in April, and an improvement in financial conditions, including a weaker U.S. dollar and fiscal expansion in some major jurisdictions.

Still on global development, global headline inflation is expected to fall to 4.2 per cent in 2025 and 3.6 per cent in 2026, a path similar to the one projected in April.

The IMF declared that the overall picture hides notable cross-country differences, with forecasts predicting inflation will remain above target in the United States and be more subdued in other large economies.

Concerning the emerging market and developing economies, growth is expected to be 4.1 per cent in 2025 and four per cent in 2026.

It said relative to the forecast in April, growth in 2025 for China is revised upward by 0.8 per cent to 4.8 per cent. The revision reflects stronger-than-expected activity in the first half of 2025 and the significant reduction in US-China tariffs, the report said.

The GDP outturn in the first quarter of 2025 alone implies a mechanical upgrade to the growth rate for the year of 0.6
per cent.

The report observed that a recovery in inventory accumulation is expected to partly offset payback from front-loading in the second half of 2025.

The IMF noted that growth in 2026 is also revised upward by 0.2 per cent to 4.2 per cent, again reflecting the lower effective tariff rates.