The International Monetary Fund (IMF) said that Nigeria’s economic growth has declined by 0.3% points to 2.9% for 2023 due to lower oil and gas production.

This was made known at the World Economic Outlook (for October) with the theme: ‘Navigating Global Divergences.’

It could be recalled that in July, the lending institution projected that the country’s economy would grow at 3.1% in 2024, with the negative effects of high inflation on consumption taking hold.

The IMF said global headline inflation is expected to steadily decline from its peak of 8.7 per cent in 2022 (annual average) to 6.9 per cent in 2023 and 5.8 per cent in 2024.

According to its projection report “Growth in Nigeria is projected to decline from 3.3 per cent in 2022 to 2.9 per cent in 2023 and 3.1 per cent in 2024, with negative effects of high inflation on consumption taking hold.

“On a year-over-year basis, projected global headline inflation peaked at 9.5 per cent in the third quarter of 2022 and is projected to reach 5.9 per cent by the fourth quarter of 2023 before falling to 4.8 per cent in the fourth quarter of 2024, still above the pre-pandemic (2017–19) annual average of about 3.5 per cent,” the report said.

Although the IMF said monetary tightening is starting to bear fruit, a central driver of the fall in headline inflation projected for 2023 is declining international commodity prices.

It added that nearly three-quarters of economies are expected to see lower headline inflation in 2023, but the pace of disinflation is especially pronounced for advanced economies.

These economies, the IMF said, are expected to see (annual average) inflation fall by 2.7 percentage points in 2023, about double the (1.3 percentage point) decline projected for emerging markets and developing economies.

It explained that part of this difference reflects advanced economies’ benefiting from stronger monetary policy frameworks and communications, which facilitate disinflation, but the difference also reflects lower exposure to shocks to commodity prices and exchange rates.

In low-income developing countries, the IMF said inflation is on average projected to be in double digits and is not expected to fall until 2024.

“There are also large differences in the expected pace of change in headline inflation across major economies, reflecting different starting points. The euro area is expected to see an especially sharp fall in (year-over-year) inflation in 2023 of 6.6 percentage points from 9.9 per cent in the fourth quarter of 2022 to 3.3 per cent in the fourth quarter of 2023, with the fall reflecting in part the decrease in energy prices,” it said.