The IMF has increased Nigeria’s 2025 GDP forecast from 3.2% in 2024 to 3.4%

Nigeria’s GDP is expected to increase by 3.4% in 2025, which is marginally higher than the 3.2% growth in 2024, according to IMF projections.

Nigeria’s 2025 GDP growth forecast has been raised by the International Monetary Fund (IMF) to 3.4 percent, which is somewhat higher than the 3.2 percent reported in 2024 and higher than the IMF’s first estimate of 3 percent that was made public in April.

The declaration comes after the 2025 Article IV consultation with Nigeria, which is a regular evaluation of a nation’s economic performance and policy direction, was concluded by the IMF Executive Board.

Key structural changes carried out by Nigerian authorities over the previous two years, such as the elimination of fuel subsidies, the halting of monetary financing of fiscal deficits, and initiatives to stabilize the foreign exchange market, were credited by the IMF with improving the outlook.

The IMF stated in a statement released on Wednesday that “over the past two years, Nigerian authorities have implemented major reforms which have improved macroeconomic stability and enhanced resilience.” “Investor confidence has increased, enabling Nigeria to successfully access the Eurobond market and resulting in a continuation of inflows into the portfolio.”

A thriving services sector and increased hydrocarbon production were the key drivers of 2024’s growth acceleration to 3.4 percent, while deteriorating productivity and ongoing security issues kept agriculture output muted.

In 2025, the IMF anticipates the same growth rate of 3.4 percent, bolstered by rising oil production, the construction of a new domestic refinery, and sustained service sector strength. Despite a “complex and uncertain external environment,” reform momentum is expected to support medium-term growth, which is expected to stay at about 3.5 percent.

Additionally, inflation has begun to decline. Based on the rebased Consumer Price Index from the Nigerian Bureau of Statistics, the fund observed that year-over-year inflation decreased to 23.7 percent in April 2025 from an annual average of 31 percent in 2024. Tight macroeconomic measures, increased food production, and naira stabilization were the main causes of the reduction. With the help of a predicted decline in retail fuel prices, inflation is predicted to continue to decline over the medium term.

With higher gross and net international reserves, a robust current account surplus, and more portfolio inflows, Nigeria’s external situation also strengthened in 2024. Targeted interventions and foreign exchange market reforms contributed to the naira’s stabilization.

Fiscal performance improved in 2024 as a result of greater grants, better revenue management, and naira depreciation, which more than offset higher interest and overhead costs.

The IMF did, however, issue a warning about growing negative risks. It stated that a further drop in oil prices or a rise in financing costs would have a negative impact on growth, fiscal and external positions, financial stability, and exchange rate pressures.

The Fund also noted that food security and economic performance are continuously threatened by insecurity. It pointed out that any worsening could reduce growth potential and exacerbate the existing high rates of food insecurity and poverty.