Nigeria’s economy is projected to shrink by -3.4 per cent in 2020, lower than global growth contraction projected at -3.0 per cent in 2020, according to world economic outlook released by the International Monetary Fund (IMF) on Tuesday.
The Washington based Fund also projected global growth to contract by -3.0 per cent in 2020, an outcome far worse than during the 2009 global financial crisis.
This global growth forecast is marked down by more than 6% relative to the October 2019 world economic outlook and January 2020 outlook.
In China, even with a sharp rebound in the remainder of the year and sizable fiscal support, the economy is projected to grow at a subdued 1.2% in 2020.
Presenting the world economic outlook at the ongoing virtual Spring meeting of the IMF and the World Bank group in Washington D.C., the IMF Chief Economist, Gita Gopinath, however, projected Nigeria’s economy to grow by 2.4 per cent in 2021.
Nigeria’s inflation rate is projected to rise by 13.4 per cent in 2020 from 11.4 per cent in 2019 and to moderate to 12.4 percent in 2021, higher than the Central Bank of Nigeria (CBN) single digit target of 6-9 per cent.
A much larger fraction of countries is expected to experience negative per capita income growth in 2020 than at the time of the 2009 financial crisis.
The coronavirus outbreak has shattered global economy, forcing IMF, World Bank and other global funds to review growth forecast downwards or outright reversal.
Oil prices declined by 39.6% in March to $32.30 as the COVID-19 outbreak abruptly reversed a positive trend as containment measures directly hit the transportation sector, which accounts for more than 60% of oil demand.
The price impact on commodities has varied significantly, depending on the specific end-use sectors, regions affected by the outbreak, storability and supply elasticity of the commodity.
Flight to safety has supported gold prices.
From mid-Jan to end-March, base metal prices fell about 15%, natgas prices declined by 38%, and crude oil prices dropped by about 65% (a fall of about $40 a barrel). Futures markets indicate that oil prices will remain below $45 a barrel through 2023.
The currencies of commodity exporters with flexible exchange rates among #EM and advanced economies have depreciated sharply since the beginning of the year, while the US dollar has appreciated by some 8½ percent in real effective terms as of April 3.