The International Monetary Fund (IMF) has revised its 2020
gross domestic growth projections for the Nigerian economy.
In its October World Economic Outlook report released in
Washington on Tuesday, the IMF projected that Nigeria’s economy will contract
by 4.3 percent in 2020.
This is a 1.1 percent improvement from the 5.4 percent that
was projected in June and deeper than the 3.4 percent projected in April.
The Washington-based institution projected that the economy
will recover in 2021 by 1.7 percent.
Gita Gopinath (pictured), IMF chief economist and director
of the research department, said oil-exporting countries are battling the
health and economic impact of the COVID-19 pandemic and the impact of low oil
prices.
“They have been hit by the health crisis and they have been
hit because they are oil exporters which had a collapse and more importantly,
they just don’t have the resources that advanced economies have to deal with
this crisis,” Gopinath said.
“Because we don’t have a financial crisis at this point,
many emerging markets are able to borrow at record levels in foreign currency
this year relative to previous years.”
The IMF chief economist said the foreign debts been acquired
by emerging market economies will not be enough and advised that there is a
need for continued international support.
This support, Gopinath explained, could be in terms of
concessionary financing, aid and debt relief and restructuring.
“There are going to be developing and low-income economies
that would need debt relief and, in some cases, restructuring of debt to make
sure they have the space to do the spending that they need,” she said.
This contraction will be the worst recession in 30 years,
and the second recession in five years, following closely after a negative
economic growth of 1.51% in 2016.
In 1987, Nigeria’s economy receded by -10.87 and -0.6 in
1991.
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