July 8 (THEWILL) — The International Monetary Fund (IMF) has projected that Nigeria’s economy will expand by 4.1 percent in 2026 and accelerate to 4.3 percent in 2027, even as global economic growth is expected to slow to 3.0 percent next year amid the combined effects of geopolitical conflicts, inflationary pressures and uneven gains from technological advancement.
The projection is contained in the IMF’s July 2026 World Economic Outlook (WEO) Update, released on Wednesday and titled “Global Economy in Crosscurrents of War and Technology.”
The report forecasts global growth to moderate from an estimated 3.5 percent in 2025 to 3.0 percent in 2026 before recovering to 3.4 percent in 2027.
According to the Fund, Nigeria’s improved outlook is underpinned by stronger macroeconomic stability and favourable terms of trade following recent policy reforms, although persistent increases in the prices of essential goods continue to threaten household welfare.
“Nigeria is supported by improved macroeconomic stability and favourable terms-of-trade effects, though higher prices for essentials are expected to further aggravate poverty and food insecurity”, the IMF stated.
The report noted that the global economy remains caught between the disruptive effects of the ongoing conflict in the Middle East and the growth opportunities presented by rapid advances in Artificial Intelligence (AI).
It explained that while energy-exporting countries outside the conflict zone are benefiting from stronger commodity prices, economies integrated into the AI-driven technology value chain are recording stronger economic activity, even where they remain net energy importers.
“The impact varies widely based on countries’ exposure to the war and position in the technology value chain. Energy exporters outside the conflict zone benefit from favourable terms of trade, whereas economies plugged into the technology-led upturn experience stronger activity even if they are energy importers”, the report said.
However, the IMF warned that energy-importing countries with limited participation in the technology value chain are likely to experience weaker economic performance due to rising energy costs and limited productivity gains.
The Fund also projected that global headline inflation will increase from an estimated 4.1 percent in 2025 to 4.7 percent in 2026 before easing to 3.9 percent in 2027, indicating that the disinflation trend observed since early 2024 has stalled.
For Sub-Saharan Africa, economic growth is expected to remain steady at 4.3 percent in 2026 before rising slightly to 4.5 percent in 2027. However, the IMF cautioned that the regional outlook masks significant differences among countries owing to varying levels of policy space, reform implementation and exposure to external shocks.
The report added that oil-importing, non-resource-intensive economies would be hit hardest by higher food and energy prices, while some larger economies in the region would continue to benefit from earlier macroeconomic stabilisation and reform efforts despite remaining largely outside the AI-driven technology boom and facing declining official development assistance.
Among advanced economies, growth is projected at 1.7 percent in 2026 and 1.8 percent in 2027. Emerging markets and developing economies are expected to slow to 3.8 percent in 2026 before recovering to 4.5 percent the following year.
The IMF forecast that economic growth in the Middle East and Central Asia would plunge to 0.7 percent in 2026 before rebounding sharply to 6.5 percent in 2027. Growth in Latin America and the Caribbean is expected to remain stable at 2.4 percent in 2026 before edging up to 2.7 percent in 2027, while emerging and developing Europe is projected to record restrained growth of around 2.0 percent.
Although the Fund said risks to the global outlook are now more balanced than they were in its April forecast, it stressed that they remain tilted to the downside.
It warned that renewed escalation of the conflict in the Middle East could prolong commodity price volatility, further disrupt global supply chains, push inflation higher and tighten financial conditions worldwide.
The report also identified growing trade fragmentation, possible corrections in technology-driven financial markets and weakening fiscal buffers across many economies as additional downside risks.
The IMF said faster-than-expected normalisation in energy markets, stronger investment in AI and digital technologies, renewed international cooperation to lower trade barriers and sustained structural reforms could improve medium-term global growth prospects.
To strengthen economic resilience, the Fund urged policymakers to maintain price stability through credible monetary policies, clear communication, central bank independence and effective financial sector supervision.
It also recommended rebuilding fiscal buffers while ensuring that fiscal support remains temporary and targeted to protect vulnerable groups without distorting market price signals.
According to the IMF, structural reforms focused on improving energy security, enhancing AI readiness and deepening international cooperation will be essential to sustaining economic growth in an increasingly uncertain global environment.
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