Key Points

• IMF raises Nigeria’s 2025 economic growth forecast to 3.9 percent.

• Reforms and oil rebound drive stronger investor confidence.

• Inflation expected to ease as reforms stabilize the economy.

The International Monetary Fund (IMF) has raised Nigeria’s economic growth forecast for 2025 to 3.9 percent, reflecting stronger domestic fundamentals, improving investor confidence, and resilience against global trade tensions.

The new projection, contained in the IMF’s October 2025 World Economic Outlook (WEO) titled “Global Economy in Flux,” represents a 0.5 percentage point increase from its July 2025 estimate and nearly one percentage point higher than its April forecast.

Although slightly below the 4.1 percent growth recorded in 2024, the IMF expects the economy to pick up again in 2026, reaching 4.2 percent as reforms gain traction and confidence deepens in key sectors.

Reforms and oil recovery driving growth

The IMF attributed Nigeria’s resilience to higher oil production, a more supportive fiscal policy, and renewed investor sentiment.

The Fund said ongoing reforms in the energy and financial sectors are starting to attract fresh capital inflows, while recent exchange rate adjustments have improved transparency in the foreign exchange market.

It added that Nigeria’s economy remains relatively shielded from the global tariff wars triggered by U.S. trade actions, which have slowed growth in several advanced economies.

Denz Igan, Division Chief at the IMF’s Research Department, said during the briefing that Nigeria’s upgraded forecast reflects growing economic stability.

“For 2025, we have revised Nigeria’s growth rate upward to 3.9 percent, 0.5 percentage point higher than our previous projection,” he said.

“This revision is supported by higher oil output, improved security in producing regions, and stronger investor confidence.”

Inflation still high but easing gradually

Despite the upbeat outlook, inflation remains one of Nigeria’s biggest challenges. The IMF expects the country’s average inflation rate to drop from 31.4 percent in 2024 to 23 percent in 2025, before easing further to 22 percent in 2026.

End-of-year inflation is projected to moderate to 21 percent in 2025 and 18 percent in 2026, indicating slow but steady progress toward price stability.

However, the Fund cautioned that food and energy costs will continue to exert upward pressure on consumer prices.

Rebased GDP strengthens outlook

The IMF also confirmed that Nigeria has completed a major rebasing of its national accounts, adopting 2019 as the new base year.

The exercise expanded coverage of previously underreported sectors such as the digital economy, informal agriculture, and modular refining, lifting nominal GDP by over 40 percent.

The Fund welcomed the rebasing as a positive step toward more accurate economic data but urged the government to maintain sound fiscal and monetary policies, strengthen institutions, and accelerate structural reforms to ensure sustained, inclusive growth.

“Nigeria’s outlook is improving,” the IMF said in its report. “But sustaining reform momentum and policy discipline will be key to maintaining stability and inclusive progress.”