By Anita Dennis
The International Monetary Fund (IMF) has revised Nigeria’s 2025 economic growth forecast upward to 3.4%, marking a 0.4 percentage point increase from its April 2025 World Economic Outlook (WEO) projection of 3.0%.
This updated forecast—published in the IMF’s July 2025 WEO Update—reflects renewed confidence in Nigeria’s economic trajectory, even amid persistent global volatility and domestic structural challenges.
Nigeria’s Growth Momentum Strengthens
According to the IMF, Nigeria’s economy is now expected to grow by 3.4% in 2025 and 3.2% in 2026, the latter representing a 0.5 percentage point increase over the previous projection. The revision is attributed to favourable financial conditions, resilient trade activity, and a temporary easing of tariff-related pressures in global markets.
While Nigeria’s growth rate remains below the Sub-Saharan African regional average—projected at 4.0% in 2025 and 4.3% in 2026—it is well ahead of South Africa, whose outlook remains flat at 1.0% in 2025 and 1.3% in 2026.
Global Growth Outlook Improves
The IMF also upgraded its global growth forecast to 3.0% for 2025, up from 2.8% in April, citing a temporary boost in global trade and investment activity spurred by the anticipated reimposition of tariffs and improved capital flows.
“This reflects stronger-than-expected front-loading in anticipation of higher tariffs; lower average effective US tariff rates than announced in April; an improvement in financial conditions, including due to a weaker US dollar; and fiscal expansion in some major jurisdictions,” the report states.
For 2026, the IMF projects global growth at 3.1%, with global headline inflation expected to decline to 4.2% in 2025 and 3.6% in 2026, broadly in line with previous estimates.
However, the Fund cautioned that the current momentum may be short-lived, warning of a potential slowdown in 2026 due to the absence of similar front-loaded stimulus.
Nigeria’s Domestic Indicators Support IMF Outlook
The IMF’s optimism is reinforced by domestic economic performance. According to the National Bureau of Statistics (NBS), Nigeria’s Gross Domestic Product (GDP) grew by 3.13% year-on-year in Q1 2025, up from 2.27% in Q1 2024.
This improvement was driven by solid growth in the services and industrial sectors, and marks continued resilience in the face of inflation and currency adjustment.
In nominal terms, GDP stood at N94.05 trillion in Q1 2025, compared to N79.51 trillion in Q1 2024—an 18.3% year-on-year increase.
The latest figures also reflect the successful rebasing of Nigeria’s national accounts from the 2010 base year to 2019, a move the NBS says provides a more current and accurate picture of the economy’s structure.
The IMF’s upgraded forecast signals growing confidence in Nigeria’s economic stabilization efforts and its ability to leverage external conditions. However, sustaining this trajectory will depend on macroeconomic reforms, fiscal discipline, and inclusive growth policies that strengthen domestic resilience amid evolving global headwinds.
