August 01, 2025/Coronation Research

The International Monetary Fund (IMF), in its July 2025 World Economic Outlook (WEO) update, revised upward Nigeria’s GDP growth forecasts for both 2025 and 2026. Their new projection places Nigeria’s growth at 3.4% in 2025—a 0.4 percentage point (ppt) increase from the April forecast—and 3.2% in 2026, up 0.5 ppt. These revisions signal improved sentiment about Nigeria’s short-term economic prospects, despite underlying macroeconomic fragilities and lingering structural constraints.

This optimism is not limited to Nigeria. The IMF also upgraded global growth to 3.0% in 2025 and 3.1% in 2026, driven by a weaker U.S. dollar, improved financial conditions, and stronger-than-expected trade activity, particularly ahead of anticipated tariff hikes. However, the report emphasizes that this global momentum may be temporary, cautioning emerging economies to strengthen internal resilience.

Nigeria

Nigeria’s upward revision reflects recent gains in real sector performance, particularly in services and industry. The National Bureau of Statistics (NBS) reported a 3.13% year-on-year real GDP growth in Q1 2025, a notable improvement from 2.27% in Q1 2024. Nominal GDP also surged to ₦94.05 trillion, following a rebasing of national accounts to 2019 prices. These indicators suggest Nigeria is gradually regaining its economic footing after years of subdued growth and fiscal imbalance.

Yet, the IMF emphasized the urgency of structural reforms. Specifically, it calls on Nigeria to fully phase out poorly targeted fuel and electricity subsidies, improve tax efficiency by removing exemptions, and preserve central bank independence. These measures are vital to unlocking fiscal space, reducing debt vulnerabilities, and promoting inclusive growth. Without these interventions, Nigeria risks stagnation while Sub-Saharan Africa’s average growth of 4.0% in 2025 and 4.3% in 2026 looks more robust.

Global Economic

Globally, the IMF’s brighter outlook is underpinned by easing inflationary pressures, trade resilience, and a 9% depreciation of the U.S. Dollar. The weaker dollar has reduced debt servicing costs for emerging markets, creating a window of opportunity to start to stabilize their external balances. In addition, U.S. tariffs under the Trump administration, though steep in rhetoric, have so far materialized at lower effective rates—17% compared to 24% previously forecast for some countries—thereby limiting their economic disruption.

The United States itself has seen a modest upgrade, with growth expected at 1.9% in 2025 and 2.0% in 2026. Meanwhile, China’s growth outlook is now 4.8% for 2025, reflecting strong export performance to Asian markets and currency depreciation aligned with the U.S. Dollar’s fall. Together, these developments have created a more supportive global environment, benefiting commodity exporters like Nigeria.
 

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