…Cites stronger domestic fundamentals
…Calls for credible fiscal and monetary policies
By Babajide Komolafe, Economy Editor and Emma Ujah, Abuja Bureau Chief
The International Monetary Fund (IMF) has revised Nigeria’s economic growth outlook upward to 3.9 per cent , citing stronger domestic fundamentals and improving investor confidence, as well as moderated impact of global tariff war.
The outlook represents a 0.5 percentage point increase from the IMF’s July 2025 update and nearly 1 percentage point higher than earlier April forecasts.
Disclosing this in its October 2025 World Economic Outlook (WEO) titled “Global Economy in Flux”, the IMF projected that Nigeria’s real Gross Domestic Product (GDP) will grow by 3.9 percent in 2025, slightly lower than the 4.1 percent recorded in 2024, but expected to accelerate to 4.2 percent in 2026.
The IMF attributed Nigeria’s growth resilience to higher oil production, a more supportive fiscal stance, and improving investor sentiment. The report noted that reforms in the energy and financial sectors have begun to attract renewed capital inflows, while exchange rate adjustments have improved transparency in the foreign exchange market.
The Fund also observed that Nigeria’s economy is less exposed to the global tariff wars triggered by new U.S. trade measures, which have weakened growth prospects in many advanced economies.
Despite the growth optimism, inflation remains elevated. The IMF forecasts that Nigeria’s average consumer prices will decline from 31.4 percent in 2024 to 23.0 percent in 2025, and further to 22.0 percent in 2026.
End-of-period inflation is projected at 21 percent in 2025 and 18 percent in 2026, reflecting slow disinflation amid persistent food and energy price pressures.
External Position and Data Revisions
Nigeria’s current account surplus is expected to narrow from 6.8 percent of GDP in 2024 to 5.7 percent in 2025, and further to 3.6 percent in 2026, as higher imports offset oil export gains.
The IMF noted that the projections incorporate a major rebasing of Nigeria’s national accounts, with 2019 adopted as the new base year. The revised data now capture previously underreported sectors, including the digital economy, informal agriculture, and modular refining activities — raising nominal GDP by over 40 percent.
While welcoming the upward revision, the IMF urged Nigeria to sustain credible fiscal and monetary policies, strengthen institutional frameworks, and accelerate reforms to entrench macroeconomic stability and inclusive growth.
Speaking on Nigeria’s Growth Outlook, Denz Igan, at the press briefing on the WEO, Division Chief, Research Department, IMF, said: “For 2025, we have revised Nigeria’s growth rate upward to 3.9 percent, which is 0.5 percentage point higher than our previous projection. We have also upgraded the 2026 forecast by 0.9 percentage point, to 4.2 percent.
“Looking back, the 2024 GDP growth estimate has been revised upward to 4.1 percent, 0.7 percentage point higher than earlier figures. This reflects the authorities’ GDP revision and rebasing exercise, which provides broader coverage of economic activity, including parts of the informal sector previously not captured.
“For 2025 and 2026, the upward revisions mainly reflect reduced uncertainty and Nigeria’s limited exposure to U.S. tariffs, given its relatively low dependence on global trade. Since July, we’ve also seen exchange rate appreciation, stronger financial conditions supported by rising investor confidence, and a supportive fiscal stance.
“In addition, hydrocarbon growth has been revised upward due to higher oil production and improved security in producing areas. Together, these factors contribute to a more positive outlook for Nigeria’s economy.”
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