The International Monetary Fund (IMF) has increased Nigeria’s growth forecast to 3.9 per cent, referencing enhanced domestic economic indicators and rising investor optimism, alongside reduced effects from international trade tensions.
This projection marks a 0.5 percentage point improvement over the IMF’s July 2025 assessment and approaches 1 percentage point above the April predictions.
In its October 2025 World Economic Outlook (WEO) report entitled “Global Economy in Flux”, the IMF indicated that Nigeria’s real Gross Domestic Product (GDP) will expand by 3.9 percent in 2025, marginally below the 4.1 percent achieved in 2024, but anticipated to rise to 4.2 percent in 2026.
The IMF linked Nigeria’s economic strength to increased oil output, more favourable fiscal conditions, and enhanced investor confidence. The analysis highlighted that policy changes in the energy and banking sectors have started generating fresh capital investments, while currency rate modifications have enhanced foreign exchange market clarity.
The organisation also recognised that Nigeria’s economy faces limited vulnerability to worldwide tariff disputes initiated by recent U.S. trade policies, which have diminished economic prospects across numerous developed nations.
Notwithstanding the positive growth indicators, inflation continues at high levels. The IMF anticipates that Nigeria’s average consumer price increases will drop from 31.4 per cent in 2024 to 23.0 per cent in 2025 and subsequently to 22.0 per cent in 2026.
Year-end inflation is estimated at 21 per cent in 2025 and 18 per cent in 2026, indicating gradual price stabilisation amid ongoing food and energy cost challenges.
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Trade Balance and Statistical Updates
Nigeria’s current account balance is projected to decrease from 6.8 per cent of GDP in 2024 to 5.7 per cent in 2025 and continue to 3.6 per cent in 2026, as increased imports counterbalance petroleum export revenues.
The IMF observed that these forecasts include substantial recalculation of Nigeria’s economic statistics, with 2019 established as the updated reference year. The amended figures now include formerly undercounted industries, such as technology services, unregistered farming, and small-scale refining operations, increasing nominal GDP by more than 40 percent.
While acknowledging the positive revision, the IMF encouraged Nigeria to maintain reliable fiscal and monetary measures, enhance institutional structures, and expedite policy changes to establish long-term economic stability and broad-based development.
Addressing Nigeria’s economic trajectory, Denz Igan, at the WEO media briefing, Division Chief, Research Department, IMF, stated, “For 2025, we have adjusted Nigeria’s growth forecast upward to 3.9 percent, representing a 0.5 percentage point increase from our earlier estimate. We have similarly improved the 2026 projection by 0.9 percentage points, to 4.2 per cent.
In retrospect, the 2024 GDP growth figure has been revised upward to 4.1 per cent, 0.7 percentage points above previous calculations. This incorporates the authorities’ GDP revision and statistical rebasing initiative, which offers a more comprehensive representation of commercial activity, including informal sector segments previously excluded.
For 2025 and 2026, the upward adjustments primarily indicate diminished uncertainty and Nigeria’s modest vulnerability to U.S. tariffs, considering its comparatively limited integration with international trade. Since July, we’ve also observed currency strengthening, improved market conditions backed by increasing investor trust, and favourable government spending policies.
Furthermore, petroleum sector growth has been revised upward owing to elevated oil production and enhanced security in extraction regions. Collectively, these elements support a more optimistic perspective for Nigeria’s economic future.”
