The International Monetary Fund (IMF) has revised its 2020 gross domestic growth projections for the Nigerian economy.
In its October World Economic Outlook report released in Washington on Tuesday, the IMF projected that Nigeria’s economy will contract by 4.3 percent in 2020 in real terms.
This is a 1.1 percent improvement from the 5.4 percent that was projected in June and deeper than the 3.4 percent projected in April.
The Washington-based institution projected that the economy will recover in 2021 by 1.7 percent.
The Chief Economist and Director of the research Department, Gita Gopinath, said oil-exporting countries are battling the health and economic impact of the COVID-19 pandemic and the impact of low oil prices.
“They have been hit by the health crisis and they have been hit because they are oil exporters which had a collapse and more importantly, they just don’t have the resources that advanced economies have to deal with this crisis,” Gopinath said.
“Because we don’t have a financial crisis at this point, many emerging markets are able to borrow at record levels in foreign currency this year relative to previous years.”
The IMF chief economist said the foreign debts been acquired by emerging market economies will not be enough and advised that there is a need for continued international support.
This support, Gopinath explained, could be in terms of concessionary financing, aid and debt relief and restructuring.
“There are going to be developing and low-income economies that would need debt relief and, in some cases, restructuring of debt to make sure they have the space to do the spending that they need,” she said.
This contraction will be the worst recession in 37 years, and the second recession in five years, following closely after a negative economic growth of 1.58% in 2016.
In 1983, Nigeria’s GDP at 2010 constant price receded by -10.93.