IMF Raises Nigeria’s Economic Outlook for 2025, Signals Modest Regional and Global Improvements
Nigeria’s economic prospects received a modest lift as the International Monetary Fund (IMF) revised upward its growth forecast for the country in 2025, projecting a 3.4 percent expansion. This updated estimate marks a 0.4 percentage point increase from the Fund’s April projection of 3.0 percent, reflecting improved expectations despite lingering global uncertainties.
The upward revision was contained in the IMF’s July 2025 World Economic Outlook (WEO) report, which also delivered a broader message of cautious optimism for the global economy. According to the report, Nigeria’s growth is now also expected to reach 3.2 percent in 2026, up from the previous forecast of 2.7 percent.
Across the global stage, the IMF has adjusted its forecast for world economic growth to 3.0 percent in 2025, up from 2.8 percent projected earlier in April. The outlook for 2026 was nudged slightly higher as well, now pegged at 3.1 percent. Similarly, Sub-Saharan Africa is set for steady improvement, with growth projected to hit 4.0 percent in 2025 and rise to 4.3 percent in 2026 — both modestly above earlier estimates.
“Growth is expected to be relatively stable in 2025 in sub-Saharan Africa at 4.0 percent, before picking up to 4.3 percent in 2026,” the IMF noted, attributing the regional improvement to stronger domestic demand and progress in structural reforms across key economies.
IMF Chief Economist, Pierre-Olivier Gourinchas, attributed the global uptick in forecasts to a combination of factors, including unexpectedly strong front-loaded demand, looser financial conditions, reduced tariff rates, a weaker US dollar, and fiscal expansion in several economies. However, he emphasized that significant risks remain, and they continue to skew to the downside.
“Risks remain tilted to the downside. A breakdown in trade talks or renewed protectionism could dampen growth globally and fuel inflation in some countries. Persistent uncertainty may weigh on investment, while geopolitical tensions and fiscal vulnerabilities pose additional threats,” Gourinchas said.
He warned that although financial conditions have eased, abrupt tightening could occur, especially if central bank independence is compromised. On the brighter side, he acknowledged that successful trade negotiations and effective structural reforms could bolster long-term productivity and investor confidence.
In light of these dynamics, the IMF advised global policymakers to focus on rebuilding confidence and ensuring predictability. The Fund called for clear and transparent trade rules, strengthened fiscal frameworks, and continued price and financial stability, particularly through central bank independence and flexible exchange rate regimes.
“Reducing policy uncertainty is essential,” Gourinchas stressed. “Many countries need to address fiscal vulnerabilities and rebuild buffers, even amid rising spending needs. Structural reforms that support long-term growth and reduce policy tradeoffs are vital for sustainable prosperity.”
For Nigeria, the revised forecasts reflect cautiously growing optimism, especially as the country navigates monetary and fiscal reforms under a challenging economic climate. The outlook suggests that with consistent policy implementation and structural adjustments, Africa’s largest economy could consolidate its recovery and chart a steadier growth path into the medium term.