IMF Upgrades Nigeria’s 2025 Growth Forecast Amid Easing Inflation, Currency Stability
The International Monetary Fund (IMF) has revised its 2025 economic growth forecast for Nigeria upward, projecting a 3.4% expansion—higher than its April estimate of 3.0%. Analysts attribute this positive outlook to easing inflation, relative stability in the naira, and increased oil production. Nigeria’s growth projection also outpaces the global forecast of 3.0%, with the IMF upgrading sub-Saharan Africa’s expected growth to 4.0% in part due to Nigeria and South Africa’s improved economic indicators.
According to analysts from Afrinvest West Africa, the IMF’s improved forecast is likely driven by Nigeria’s strong Q1 2025 economic activity. The oil sector played a significant role, supported by improved security and investment that boosted output. Inflation slowed for the third consecutive month, dropping to 22.2% in June 2025—the lowest in half a year. Meanwhile, the naira showed relative stability, depreciating only 0.1% year-to-date, a stark contrast to the nearly 39% drop recorded during the same period in 2024.
Increased oil refining activity, including output from modular and Dangote refineries, led to an 11.5% jump in Q1 refining metrics. This growth contributed positively to Nigeria’s external reserves, current account balance, inflation moderation, and overall economic output. Analysts say these gains reinforce the IMF’s optimism and align closely with local projections such as Afrinvest’s 3.3% growth estimate for 2025.
Coronation Merchant Bank also noted improved real sector performance in both services and industry, reflected in Q1 GDP figures showing 3.13% year-on-year growth—up from 2.27% the previous year. The rebasing of Nigeria’s national accounts to 2019 prices pushed nominal GDP to N94.05 trillion. Analysts, however, cautioned that for sustained progress, Nigeria must phase out poorly targeted subsidies, broaden the tax base, and ensure the Central Bank remains independent.
The IMF’s World Economic Outlook Update for July 2025, titled “Tenuous Resilience amid Persistent Uncertainty,”emphasized that while global and regional forecasts have improved slightly, significant downside risks remain. Key threats include rising protectionism, geopolitical tensions, and financial market instability, all of which could still challenge Nigeria’s medium-term economic recovery.
Source: Leadership