Amid slow economic recovery due to the COVID-19 pandemic, the International Monetary Fund on Wednesday downgraded its expectations for the Nigerian economy for 2020 fiscal year.
The IMF’s outlook indicates that Nigeria’s Gross Domestic Product will shrink by 5.4 per cent in 2020.
The Fund had in April projected a 3.4 per cent decline in GDP but an assessment of economic trends associated with the pandemic compelled it to review its earlier position.
The global financial institution said the economy will experience a recovery of 2.6 per cent in 2021 a growth of 200 basis points when compared to the 2.4 per cent April projection for 2021.
In its presentation on Wednesday following the release of the June 2020 World Economic Outlook, the Fund further disclosed that the global economy in 2020 and 2021 would further contract by 4.9 per cent and three per debt respectively.
Yesterday’s forecast represents a downgrade from its April projection of three per cent contraction in 2020 and a recovery of 2.2 per cent in 2021.
It said, “Compared to our April World Economic Outlook forecast, we are now projecting a deeper recession in 2020 and a slower recovery in 2021. We are projecting a synchronised deep downturn in 2020 for both advanced economies and emerging markets and developing economies.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.”
Meanwhile, losses in Nigeria’s securities market extended into a third consecutive trading session Wednesday, as sell-offs in Seplat, Nigerian Breweries and International Breweries dragged its benchmark index 0.38 per cent lower to close at 24,655.05 points. Consequently, market capitalisation declined by N50 billion to N12.861 trillion while year-to-date (YTD) loss worsened to -8.2 per cent.
However, activity level on the bourse improved as the volume and value of stocks traded rose 12.7 and 23.8 per cent to 189.2 million units and N1.91 billion respectively, exchanged in 3,364 deals. The most active stocks by volume were FBN Holdings (44.4 million units), Zenith Bank (21.3 million units) and Access Bank (18.9m units) while Zenith Bank (N349.4 million), FBNH (N241.1 million) and Seplat (N241.0 million) led by value.
Uche Usim and Chinwendu Obienyi, The Sun