SAN FRANCISCO, April 18, (THEWILL) – The International Monetary Fund, IMF, on Tuesday, disclosed that the economic downturn in Nigeria within a five-year period had a negative impact on the economies of low-income countries across the world.
In its Global Financial Report for April 2017 released during a media briefing at the ongoing World Bank/IMF Spring Meetings in Washington DC, United States, IMF stated that Nigeria’s drastic economic decline from 2011 to 2016 highly affected those developing countries.
“The lion’s share of the 1.6 percentage point decline in growth between 2011 and 2016 is attributable to the drastic slowdown in Nigeria, an oil exporter that in 2016 accounted for more than 20 per cent of purchasing-power-parity GDP of low-income countries and about half of the GDP of commodity exporters in this country group,” the report stated.
It however added that there would be stability of growth in low-income countries that were not primarily commodity exporters, excluding Nigeria.
“There will be stability of growth in low-income countries that are not primarily commodity exporters, a group of countries that are not primarily commodity exporters, in which Bangladesh and Vietnam have large weights, as well as the milder slowdown in low-income commodity exporters excluding Nigeria, when compared with all commodity exporters,” the report stated.
The Bretton Woods institution also raised the global economic growth projection for 2017 to 3.5 per cent from the 3.4 per cent it had forecast in January.
The change, contained in the April 2017 report, however, left Nigeria’s growth rate for 2017 unchanged at 0.8 per cent.
The report also forecast a slide of 0.4 per cent growth for Nigeria in 2018 to 1.5 per cent from the 1.9 per cent it had earlier projected, although global economy is expected to increase its growth rate by 0.01 per cent to hit 3.6 per cent in 2018.
IMF’s Year-on-Year projection for Nigeria for 2017 and 2018 remains unchanged at 0.8 per cent and 1.9 per cent respectively.
According to the report, “after contracting by 1.5 per cent in 2016 because of disruptions in the oil sector, coupled with foreign exchange, power, and fuel shortages, output in Nigeria is projected to grow by 0.8 per cent in 2017 as a result of a recovery in oil production, continued growth in agriculture and higher public investment.”
On the global note, the report said “the economic upswing that we have expected for some time seems to be materialising: indeed, the World Economic Outlook (WEO) raises its projection for 2017 global growth to 3.5 per cent, up from our recently forecast 3.4 per cent.”
It added that “stronger activity and expectations of more robust global demand, coupled with agreed restrictions on oil supply, have helped commodity prices recover from their troughs in early 2016.
“Higher commodity prices have provided some relief to commodity exporters and helped lift global headline inflation and reduce deflationary pressures. “Financial markets are buoyant and expect continued policy support in China and fiscal expansion and deregulation in the United States.
“If confidence and market sentiment remain strong, short-term growth could indeed surprise on the upside.”
It, however, warned that these positive developments should not distract from the likelihood of binding structural impediments to a stronger recovery and a balance of risks that remains tilted to the downside, especially over the medium term.
