Soaring prices of basic necessities will drive additional Nigerians into poverty, warns International Monetary Fund.

The International Monetary Fund has maintained its forecast for Nigeria's GDP growth at 4.1% in 2026 and 4.3% in 2027, citing improved macroeconomic stability as a key supporting factor for the economy.

n

Despite this positive outlook, the IMF warns that rising prices of essential goods will exacerbate poverty and food insecurity in Nigeria, highlighting the need for continued economic vigilance.

n

In its July 2026 World Economic Outlook Update, the IMF revised its global economic growth forecast downward to 3.0% in 2026, a decrease from the average 3.5% recorded in 2024 and 2025, due to the impact of the Middle East conflict and uneven benefits from the artificial intelligence-driven technology boom.

n

The IMF notes that growth in sub-Saharan Africa is expected to remain stable at 4.3% in 2026, although this masks significant differences in growth across countries, reflecting variations in policy space, reform implementation, and exposure to external shocks.

n

Oil-importing, non-resource-intensive economies are particularly vulnerable to higher energy and food prices, whereas some larger economies, including Nigeria, continue to benefit from earlier stabilization and reform efforts.

n

Nigeria's economy is supported by improved macroeconomic stability and favorable terms-of-trade effects, although higher prices for essential goods are expected to further worsen poverty and food insecurity.

n

The IMF projects Nigeria's economy to expand by 4.1% in 2026 and 4.3% in 2027, while Sub-Saharan Africa is expected to record growth of 4.3% in 2026 and 4.5% in 2027.

n

Global growth is projected to be 3.0% in 2026 and 3.4% in 2027, down from the average of 3.5% observed in 2024-25, according to the IMF.

n

The modest slowdown in global growth reflects the effects of the war in the Middle East being partly offset by accelerated demand-driven momentum in the global technology cycle, driven by advances in artificial intelligence and its adoption.

n

Global headline inflation is expected to increase from 4.1% in 2025 to 4.7% in 2026 before declining to 3.9% in 2027, as the earlier disinflation trend has stalled, the IMF reports.

n

The IMF highlights several risks to the outlook, including the possibility of renewed Middle East conflict, which could extend commodity price volatility, further threaten supply chains, raise prices, and weigh on financial conditions.

n

Additionally, the IMF warns that trade fragmentation could accelerate, potentially hurting output and increasing prices, and stresses that governments should restore price stability, rebuild fiscal buffers, and pursue structural reforms to strengthen energy security, AI readiness, and international cooperation.