…Global growth projected at 3.0%
By Seun Ibiyemi
The International Monetary Fund (IMF) has maintained its forecast for a 3.4 per cent expansion in Nigeria’s real Gross Domestic Product (GDP) for 2025, despite recent changes to the country’s statistical methodology by the National Bureau of Statistics (NBS).
The projection comes against the backdrop of global growth forecasts of 3.0 per cent in 2025 and 3.1 per cent in 2026, as the global economy navigates significant policy shifts.
The IMF disclosed this in its July 2025 World Economic Outlook (WEO) Update, titled “Global Economy: Tenuous Resilience amid Persistent Uncertainty”, released on Tuesday.
Nigeria retained its ranking as Africa’s fourth-largest economy following a GDP rebasing exercise that expanded its economic size. According to the NBS, Nigeria’s economy grew to ₦372.8 trillion ($243 billion) in 2024, up from ₦314.02 trillion in 2023, as more sectors of the informal economy were incorporated into official calculations. Despite this revision, the country has yet to regain its previous status as the continent’s largest economy.
The IMF’s 3.4 per cent growth forecast for 2025 marks an increase from the 3.0 per cent projection made in April 2025. The 2026 forecast was also revised upwards by 0.1 percentage points. According to the Fund, the upward revisions reflect stronger-than-expected front-loading from anticipated higher tariffs and lower average effective United States tariff rates than those projected in April.
The outlook further factors in improved financial conditions, partly due to a weaker U.S. dollar and fiscal expansion in several major economies.
Global headline inflation is now projected to fall to 4.2 per cent in 2025 and 3.6 per cent in 2026, following a trajectory similar to that outlined in April.
“However, the overall outlook masks wide variations across countries. Inflation is expected to stay above target in the United States while remaining more subdued in other major economies,” the report noted.
Among advanced economies, growth is projected at 1.5 per cent in 2025 and 1.6 per cent in 2026. U.S. economic growth is forecast to rise to 1.9 per cent in 2025 and 2.0 per cent in 2026, representing an upward revision of 0.1 percentage points from the April reference forecast, although private sector demand is expected to cool more quickly than anticipated, and immigration is projected to slow.
In the euro area, growth is expected to pick up to 1.0 per cent in 2025 and 1.2 per cent in 2026. Other advanced economies are forecast to see a decline to 1.6 per cent in 2025 before recovering to 2.1 per cent in 2026.
For emerging markets and developing economies, growth is projected to reach 4.1 per cent in 2025 before easing slightly to 4.0 per cent in 2026. China’s growth forecast for 2025 has been revised upwards by 0.8 percentage points to 4.8 per cent, supported by stronger-than-expected performance in the first half of 2025 and a significant reduction in U.S.–China tariffs.
Growth in Sub-Saharan Africa is forecast to remain steady at 4.0 per cent in 2025, as previously predicted in April, before rising to 4.3 per cent in 2026. Nigeria is expected to post growth of 3.4 per cent in 2025 and 3.2 per cent in 2026.
In the Middle East and Central Asia, growth is projected at 3.4 per cent in 2025 and 3.5 per cent in 2026. Latin America and the Caribbean are expected to slow to 2.2 per cent in 2025 before recovering to 2.4 per cent in 2026.
Emerging and developing Europe is forecast to experience subdued growth of 1.8 per cent in 2025 and 2.2 per cent in 2026.
The IMF report further noted that policy uncertainty is expected to remain high through 2025 and 2026. Energy commodity prices are projected to decline by about 7.0 per cent in 2025, less than previously anticipated in the April WEO.
Downside risks continue to dominate the outlook. The IMF warned that a rebound in effective tariff rates could weaken growth, while heightened uncertainty might weigh more heavily on economic activity if deadlines for new tariffs pass without meaningful, lasting agreements.
Geopolitical tensions could disrupt global supply chains and trigger higher commodity prices, while larger fiscal deficits or rising risk aversion could push up long-term interest rates and tighten financial conditions. Combined with concerns about global economic fragmentation, these factors could stoke further volatility in financial markets.
On the upside, global growth could benefit from successful trade negotiations that deliver a predictable framework and lead to lower tariffs.
The IMF stressed that policies must restore confidence, provide predictability, and promote sustainability by easing geopolitical tensions, maintaining price and financial stability, rebuilding fiscal buffers, and advancing essential structural reforms.