The International Monetary Fund says Nigerian economy has begun recovering from a historic downturn benefitting from government policy support, rising oil prices and international financial assistance.
IMF disclosed this in a statement issued from its headquarters in Washington D.C. on Monday.
The organisation added that Nigeria had exited recession in fourth quarter 2020 maintaining that the country’s output rose by 4.1 per cent in the third quarter, with broad based growth except for the oil sector, which is facing security and technical challenges.
IMF further said the country’s growth is projected at 3 per cent for 2021. Headline inflation rose sharply during the pandemic reaching a peak of 18.2 per cent year-or-year in March 2021 but has since declined to 15.6 per cent in December, helped by the new harvest season and opening of land borders.
Despite the recovery in oil prices, the general government fiscal deficit is projected to widen in 2021 to 5.9 per cent of Gross Domestic Product, reflecting implicit fuel subsidies and higher security spending, according to IMF.
IMF however said, “After registering a historic deficit in 2020, the current account improved in 2021 and gross FX reserves have improved, supported by the IMF’s SDR allocation and Eurobond placements in September 2021.