The IMF’s upward revision of Nigeria’s GDP growth forecast to 3.4% for 2025 reflects improved oil output, services sector strength, and easing inflation

Nigeria’s GDP growth forecast received a significant boost as the International Monetary Fund (IMF) raised its 2025 projection to 3.40 percent, up from an earlier estimate of 3.0 percent.

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This upward revision reflects renewed optimism in the country’s economic outlook driven by stronger oil production, a resilient services sector, and easing inflation pressures.

Analysts at Meristem highlighted that the improved forecast stems from several domestic factors, including enhanced oil output, growth in refining capacity easing foreign exchange pressures, and the positive impact of recent macroeconomic reforms.

The services sector continues to show robust expansion, with sub-sectors like financial services, transportation, and ICT leading the way.

The IMF also upgraded Nigeria’s 2026 GDP growth forecast to 3.20 percent from 2.70 percent, signaling a more sustained economic recovery.

This revision aligns with recent data showing Nigeria’s Q1 2025 GDP grew by 3.1 percent year-on-year, led by non-oil sectors and strong industrial and services activity.

Inflation relief is another bright spot supporting the positive outlook.

Headline inflation eased for the third consecutive month in June to 22.2 percent—the lowest in six months—while the naira’s value showed stability with minimal depreciation in 2025 compared to steep declines in 2024.

Afrinvest analysts noted that improved oil production volumes and rising Brent crude prices have contributed to the optimism.

Despite challenges in agriculture and structural hurdles, reform efforts and sector-specific gains are expected to sustain growth momentum.

United Capital experts added that this positive forecast could translate into lower borrowing costs for businesses, as improved investor confidence encourages banks to lend more freely.

This would especially benefit entrepreneurs and sectors reliant on imports, potentially boosting profitability and production capacity.

While a GDP growth rate exceeding 4 percent remains an ambitious target, experts believe it is achievable if Nigeria addresses key structural issues, including insecurity in food-producing regions and electricity sector inefficiencies.

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Overall, the IMF’s revised forecast signals a cautiously optimistic future for Nigeria’s economy, underpinned by reform momentum, improving macro fundamentals, and growing investor confidence.