Nigeria’s GDP to Grow 3.2%-3.9% in Q2 2025 on Rebasing, FX Stability, and Stronger Business Activity

Nigeria’s economy is on track to post faster growth in the second quarter of 2025, with analysts projecting real GDP expansion between 3.2% and 3.9%. This marks an improvement over Q1 2025 growth of 3.13% and the same period last year, driven by enhanced macroeconomic stability, GDP rebasing, and strong performance in non-oil sectors like financial services, telecoms, and industry.

The positive outlook comes as the National Bureau of Statistics (NBS) prepares to release the official Q2 GDP report later this month. The recently completed GDP rebasing is expected to provide better visibility into sectoral contributions, further supporting confidence in economic momentum. Business activity has also strengthened, with the Purchasing Managers’ Index (PMI) averaging 52.2 in Q2, up from 51.3 in Q1 and 48.0 in Q2 2024, signaling sustained expansion.

Sectoral performance remains mixed but tilted toward non-oil growth. Services continue to lead the charge, with finance and insurance benefiting from bank recapitalization and telecoms gaining from tariff liberalization. The industrial sector is projected to grow by 3.6% in Q2, compared to 3.4% in Q1, aided by easing inflation and stable foreign exchange rates. However, agriculture remains a weak spot, with output projected below its long-term average due to persistent insecurity in major food-producing states.

Meanwhile, the oil sector continues to struggle, reflecting modest crude output of 1.48 million barrels per day in Q2 versus 1.47 mbpd in Q1 and lower global oil prices averaging $68.70 per barrel compared to $73.66 previously. Analysts attribute the sluggish oil performance to reduced global demand partly linked to the “Trump tariff effect,” which has weighed on crude earnings.

Overall, Nigeria’s Q2 economic outlook is anchored on key growth drivers: GDP rebasing, easing inflation, FX stability, and strong private-sector activity. Improved macro conditions have also fueled capital market optimism, with the Nigerian Exchange gaining 13.54% in Q2, its best run since early 2024. Analysts believe this combination of stability and sectoral resilience positions the economy for sustained recovery through 2025.

Source: Nairametrics