The International Monetary Fund (IMF) says inflation will
remain high despite the ongoing economic recovery in Nigeria.
The Washington-based institution said this in a statement
issued after completing a series of meetings between its team led by Jesmin
Rahman, mission chief for Nigeria at IMF, and Nigerian authorities.
The meeting was held on June 6 and 10, 2022, and discussions
centred on recent economic and financial developments and the economic outlook
for the country.
The IMF described Nigeria’s economic outlook as
“challenging” with high food prices raising food security concerns.
“Regarding the
economic outlook, GDP growth is projected at 3.4 percent (y/y) in 2022 while
inflation is expected to remain elevated,” the statement reads.
“The fiscal deficit of the consolidated government is
expected to remain high at 6.1 percent of GDP due in great measure to costly
petrol subsidies and limited tax revenue collections.”
Nigeria’s inflation reached 17.7 percent in May, led by a
renewed surge in food prices exacerbated by the war in Ukraine.
Recently, the Central Bank of Nigeria (CBN) raised the
benchmark interest rate to 13 percent to contain inflationary pressures.
“Economic recovery continues to gain strength on the back of
services and agriculture with GDP growth reaching 3.6 percent (y/y) in Q1
2022,” the statement adds.
“Regarding the external sector, the current account deficit
narrowed significantly in 2021, helped by import compression and higher net oil
balance.
“However, the improving trade balance, which has continued
so far in 2022, is having a limited impact on Foreign Exchange (FX) strains
with the exchange rate premiums in the parallel market staying in the 35-40
percent range since October 2021.
It listed downside risks in the near term to include further
deterioration of security conditions, elections, low vaccination against
COVID-19 and higher global interest rates.
On the upside, the IMF said steady private sector recovery
and further broadening of growth, the start of operations at the Dangote
Refinery and decisive steps to mobilise revenues, in line with the strategic
revenue growth initiative (SRGI), could spur inclusive growth and development.
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com