International Monetary Fund (IMF) has upgraded Nigeria’s economic growth forecast, projecting a 3.9 per cent expansion in 2025 and 4.2 percent in 2026, reflecting renewed optimism about the country’s reform-driven economic rebound.
The revised figures were announced on Tuesday during the launch of the World Economic Outlook (WEO) 2025 at the ongoing World Bank and IMF Annual Meetings in Washington, D.C.
In its July 2025 update, the IMF had forecast Nigeria’s economy to grow by 3.4 percent in 2025. The new projection marks a 0.5 percentage point upward revision, signaling increased confidence in Nigeria’s macroeconomic policies and reform momentum under the Tinubu administration.
The IMF also upgraded Nigeria’s 2026 growth forecast to 4.2 percent, compared to 3.2 percent previously predicted in July.
The improved outlook places Nigeria ahead of South Africa, whose growth is expected to edge slightly from 1.0 to 1.1 percent in 2025, but fall to 1.2 percent in 2026, while the Sub-Saharan Africa regional average was lifted to 4.1 percent in 2025 and 4.4 percent in 2026.
The IMF attributed Nigeria’s stronger growth prospects to “supportive domestic factors,” notably higher oil production, improved investor confidence, and a more favorable fiscal stance projected for 2026.
“Whereas growth in Nigeria is revised upward on account of supportive domestic factors—including higher oil production, improved investor confidence, a supportive fiscal stance in 2026, and given its limited exposure to higher U.S. tariffs—many other economies see significant downward revisions because of the changing international trade and official aid landscape,” the IMF stated.
The upward revision follows a period of key policy adjustments in Nigeria, including exchange rate unification, subsidy reforms, and a tightened monetary stance by the Central Bank of Nigeria (CBN) to curb inflation and stabilise the naira.
Globally, the IMF projects 3.2 percent growth in 2025, slowing slightly to 3.1 percent in 2026. Although this represents a modest improvement from the July 2025 update, it remains 0.2 percentage points below forecasts made before the October 2024 global policy shifts.
“This is an improvement relative to the July WEO Update—but cumulatively 0.2 percentage point below earlier forecasts, with the slowdown reflecting headwinds from uncertainty and protectionism, even though the tariff shock is smaller than originally announced,” the Fund noted.
Advanced economies are expected to grow by around 1.5 percent during 2025–2026, with the United States slowing to 2.0 percent, while emerging markets and developing economies are projected to expand just above 4.0 percent.
Global inflation is forecast to ease to 4.2 percent in 2025 and 3.7 percent in 2026, as world trade volume grows at an average rate of 2.9 percent—down from 3.5 percent in 2024, reflecting ongoing trade fragmentation and weaker global demand.
In July, the IMF concluded its 2025 Article IV consultation with Nigeria, reaffirming confidence in the government’s reform agenda and forecasting 3.4 percent growth for the year. The Fund also backed the CBN’s tight monetary policy stance, describing it as crucial for containing inflation and ensuring macroeconomic stability.
The latest WEO update suggests that Nigeria’s ongoing structural and fiscal reforms are beginning to yield measurable gains, setting the stage for stronger, more sustained growth over the medium term.
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