Nigeria’s growth forecast has been reduced from 3.3 percent to 2.9 percent in 2023 and 3.1 in 2024 respectively, with negative effects of high inflation on consumption taking hold.

The cut is contained in the World Economic Outlook released at the Annual Meeting of the IMF/World in Marrakesh, Morocco on Tuesday.

The growth forecast for 2023 is revised downward by 0.3 percentage points, reflecting weaker oil and gas production than expected, partially due to maintenance work.

The World Bank had cut Nigeria’s 2022 growth forecast to 3.1% from a previous forecast of 3.8% in 2022.

In its last Nigeria Development Update (NDU), launched in Abuja, the bank said that the country had to make hard choices or face a worse economic downturn in the months and years ahead.

Since the Swearing of President Bola Tinubu on May 29, he has removed fuel subsidy and floated the exchange rate in line with the age-long recommendation of the IMF and World Bank.

A development that has seen the rate tumble to over N1000 to the dollar, and the energy prices increase by four folds from N144 to N620, impacting an already worsening inflation scenario.

The baseline forecast is for global growth to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical (2000–19) average of 3.8 percent.

Advanced economies are expected to slow from 2.6 percent in 2022 to 1.5 percent in 2023 and 1.4 percent in 2024 as policy tightening starts to bite.

Emerging market and developing economies are projected to have a modest decline in growth from 4.1 percent in 2022 to 4.0 percent in both 2023 and 2024. Global inflation is forecast to decline steadily, from 8.7 percent in 2022 to 6.9 percent in 2023 and 5.8 percent in 2024, due to tighter monetary policy aided by lower international commodity prices.