The International Monetary Fund (IMF) has downgraded Nigeria's economic growth forecast for 2025 to 3.0%, down from its earlier estimate of 3.4% for 2024. The revision, announced in the IMF's April 2025 World Economic Outlook, comes as Nigeria grapples with declining oil supply and rising global trade tensions.
The IMF also projects that Nigeria's headline inflation will average 26.5% in 2025, following the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics. While this marks a slight improvement from the estimated 33.2% inflation in 2024, inflation is expected to spike again to 37.0% in 2026.
According to the IMF, the outlook for oil-exporting, low-income economies like Nigeria has worsened due to weakening global demand and ongoing fiscal pressures. Revenues are expected to remain under strain, with shrinking oil earnings further limiting fiscal space.
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"Exporters are set to see weakening oil supply and declining revenues, which will affect fiscal space," the report noted.
The IMF also warned that a surge in global trade restrictions—particularly new tariffs introduced by the United States—has heightened uncertainty and may trigger prolonged disruption. Pierre-Olivier Gourinchas, IMF Chief Economist, described the situation as entering "a new era" of economic realignment.
In sub-Saharan Africa, the IMF forecasts deeper economic challenges, with regional growth expected to decelerate. A potential U.S. recession poses further risks for economies with strong trade and financial links to America.
On the global front, inflation remains stubborn, particularly in advanced economies. Central banks, including the U.S. Federal Reserve, are now faced with tough policy choices as sticky inflation and new trade barriers continue to complicate monetary planning.
The IMF cautioned that forecasting has become increasingly difficult in the current economic climate, urging policymakers worldwide to prepare for a prolonged period of volatility.
