The International Monetary Fund (IMF) has maintained its growth forecasts for Nigeria’s economy in 2026 and 2027 at 4.1 per cent and 4.3 percent respectively.
The Fund, which stated this in its latest World Economic Outlook update released on Wednesday, said that the country’s growth is supported by “improved macroeconomic stability and favorable terms-of-trade effects,” even though, “higher prices for essentials are expected to further aggravate poverty and food insecurity.”
Also, the global financial institution left it growth forecast for Sub-Saharan Africa in 2026 unchanged at 4.3 percent, but raised its forecast for the region to 4.5 percent in 2027 from the 4.4 percent, it projected in April.
Although the IMF lowered its global growth forecast for 2026 to 3.0 percent from the 3.1 percent it projected in April, it raised the forecast for global growth next year to 3.4 percent from its previous 3.2 percent projection.
According to the Fund: “The modest slowdown reflects the effects of the war in the Middle East being partly offset by accelerated demand-driven momentum in the global technology cycle thanks to advances in artificial intelligence (AI) and its adoption.”
Commenting on its projections for Sub-Saharan Africa and Nigeria, the IMF said: “Oil-importing, non-resource-intensive economies are more adversely affected by higher energy and food prices, whereas some larger economies continue to benefit from earlier stabilization and reform efforts, even though they are largely absent from the AI-driven global technology upswing and face headwinds from the decline in official development assistance.
“Nigeria is supported by improved macroeconomic stability and favorable terms-of-trade effects, though higher prices for essentials are expected to further aggravate poverty and food insecurity.”
On global inflation, the IMF warned that: “Global headline inflation is expected to increase from 4.1 percent in 2025 to 4.7 percent in 2026 before declining to 3.9 percent in 2027.”
It said energy prices remain about 25 percent higher than before the conflict began on February 28 and are expected to stay elevated, adding that the forecast assumes shipping through the Strait of Hormuz will gradually resume from mid-July and return to pre-war conditions by March 2027.
The Fund said that while risks to the outlook are, “more balanced than in April,” downside risks from renewed conflict and financial market repricing persist.
“The most imminent risk to the baseline forecast stems from developments in the Middle East. Reescalation of geopolitical tensions would hurt growth and compound inflationary pressures. That said, if the reopening of the Strait of Hormuz goes more smoothly than assumed and commodity prices turn out to be lower than in the baseline, growth could be higher and inflation lower.
“Activity could also surprise on the upside in the short term if AI-related capital spending remains exceptionally strong or financial conditions ease more, continuing to offset the headwinds from geopolitical tensions, trade fragmentation, and weak policy buffers. But AI hype and exuberant financial markets could, at the same time, sow the seeds of macrofinancial instability,” it said.
It added that global trade growth is projected to slow sharply to 3.5 percent in 2026 from 5.0 percent in 2025 before recovering to 4.3percent in 2027, reflecting the impact of trade disruptions and the earlier front-loading of shipments ahead of higher US tariffs.
According to the IMF, policymakers should preserve price stability, rebuild fiscal space, and strengthen adaptability.
