Easing Inflation, Currency Stability Prompted IMF’s Nigeria Growth Upgrade – Analysts

Monetary analysts have attributed the current upward revision of Nigeria’s financial: development by the Worldwide Financial Fund’s (IMF) to enhancements in macroeconomic situations, notably, easing inflation, foreign money stability, and a stronger oil sector efficiency.

The IMF, in its July World Financial Outlook (WEO), mentioned it anticipated Nigeria to develop by 3.4 per cent in 2025, 40bps larger than the April forecast of three.0 per cent and quicker than international development of three.0 per cent, because it upgraded its development forecast for sub-Saharan Africa to 4.0 per cent in 2025 in keeping with their development expectations for Nigeria and South Africa.

Analysts imagine the revised development forecast primarily displays robust financial exercise within the first quarter of 2025, notably within the oil sector, as improved safety and funding have elevated oil manufacturing.

In line with analysts at Afrinvest West Africa, the IMF’s improved outlook for Nigeria ‘could have been supported by current positive aspects in value and foreign money stability.’ Information from the Nationwide Bureau of Statistics(NBS) had proven that headline inflation eased for the third consecutive month to 22.2 per cent in June, the bottom in six months.

On the foreign money entrance, the naira closed July at N1,533.55 to the greenback, a modest 0.1 per cent depreciation in the middle of the 12 months in comparison with the 38.8 per cent loss in worth recorded within the corresponding 2024 interval.

Saying larger crude oil manufacturing alongside current uptrend in Brent value might have supported the case for Nigeria, analysts at Afrinvest, commenting on the IMF forecast, mentioned, “we spotlight the impression of enhanced contributions of modular and Dangote refineries which drove a 11.5% rise in Oil Refining in Q1:2025. General, these have performed favourably for reserve accretion, Present Account steadiness, inflation and output development.

“In all, the IMF’s revised development forecast of three.4 per cent for Nigeria broadly aligns with our earlier projection of three.3 per cent for 2025. Regardless of the delicate agricultural efficiency in H1, the providers sector ought to stay a pillar for sustained home resilience and regular momentum. “

For analysts at Coronation Service provider Financial institution, Nigeria’s upward revision displays current positive aspects in actual sector efficiency, notably in providers and business. The Nationwide Bureau of Statistics (NBS) had reported a 3.13 per cent year-on-year actual GDP development in Q1 2025 after the rebasing, a notable enchancment from 2.27% in Q1 2024. Nominal GDP additionally surged to N94.05 trillion, following a rebasing of nationwide accounts to 2019 costs.

Noting that Nigeria’s GDP development indicators recommend the nation is progressively regaining its financial footing after years of subdued development and monetary imbalance, Coronation analysts pressured the necessity to section out poorly focused gas and electrical energy subsidies, enhance tax effectivity by eradicating exemptions, and protect central financial institution independence as identified by the IMF.

“These measures are very important to unlocking fiscal area, decreasing debt vulnerabilities, and selling inclusive development. With out these interventions, Nigeria dangers stagnation whereas Sub-Saharan Africa’s common development of 4.0 per cent in 2025 and 4.3 per cent in 2026 appears to be like extra sturdy,” the mentioned.

In its July 2025 version of the World Financial Outlook (WEO) Replace titled ‘Tenuous Resilience amid Persistent Uncertainty,’ the Worldwide Financial Fund (IMF) adopted a cautiously optimistic tone, revising its international development and inflation forecasts modestly upward relative to its April 2025 projections.

Whereas headline numbers level to a barely improved outlook, the IMF cautions that underlying dangers, notably associated to tariffs, geopolitical frictions, and monetary volatility—stay appreciable.