THE International Monetary Fund has revised Nigeria’s economic contraction from 5.4 per cent to 4.3 per cent in 2020.
It said this in its World Economic Outlook which was released on Tuesday in Washington DC, United States.
The reversal follows the country’s easing of the lockdown and re-opening of most sectors of the economy, as well as the recovery of global oil prices.
The IMF however reduced the country’s 2021 Gross Domestic Product growth forecast to 1.7 per cent, after projecting in June this year that the economy would rebound by 2.6 per cent next year.
It said, “We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast,” IMF’s Chief Economist, Gita Gopinath, said in the report.
The IMF also projected global growth to fall by 4.4 per cent in 2020, which is a less severe contraction than the 4.9 per cent contraction forecast in the June 2020 World Economic Outlook.
“The revision reflects better-than anticipated second quarter GDP out-turns, mostly in advanced economies, where activity began to improve sooner than expected after lockdowns were scaled back in May and June, as well as indicators of a stronger recovery in the third quarter,” it said.
IMF also sees global growth in 2021 to surge by 5.2 per cent, which is a little lower than the projection in June 2020.
The IMF said, “Following the contraction in 2020 and recovery in 2021, the level of global GDP in 2021 is expected to be a modest 0.6 per cent above that of 2019.
“This implies that both advanced and emerging market and developing economies will only modestly progress toward the 2020–25 path of economic activity projected before the COVID-19 pandemic.”
More than one million lives have been lost
to COVID-19 since the start of the year
and the toll continues to rise. Many
more have suffered serious illness.
It said that close to 90 million people were expected to fall into extreme
deprivation this year.
The report stated, “These are difficult times, yet there are some reasons to be hopeful. Testing has been ramped up, treatments are improving, and vaccine trials have proceeded at an unprecedented pace, with some now in the final
stage of testing.
“We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast. The revision is driven by second quarter GDP outturns in large advanced economies, which were
not as negative as we had projected; China’s return to growth, which was stronger than expected; and signs of a more rapid recovery in the third quarter.
“Outturns would have been much weaker if it weren’t for sizable, swift, and unprecedented fiscal, monetary, and regulatory responses that maintained disposable income for households, protected cash flow for firms, and supported credit provision. Collectively these actions have so far prevented a recurrence of the financial catastrophe of 2008-09.”
