The International Monetary Fund (IMF) has warned oil dependent economies like Nigeria and other countries of a possible crash of the prices of crude oil in the near future.
This comes as the Fund projected a 1.9 percent economic growth for Nigeria in 2019, while forecasting that Nigeria’s economy will grow from 0.8 percent in 2017 to 2.1 percent by the end 2018.
These forecasts are contained in the Funds latest World Economic Outlook (WEO) Report launched in Washington DC Tuesday.
While advising oil-dependent economies to intensify their economic diversification efforts. IMF said in the Outlook: “Some low-income countries like Mozambique and Nigeria have experienced financial stress or deteriorating loan quality in recent years as growth has moderated and corporate balance sheets have weakened.
“Further deterioration in loan quality would impair credit intermediation and ability of the banking sector to support growth, which would raise the risk of cost recapitalisation and severely burden the already strained public finances.’’
Maurice Obstfeld, IMF’s director of research, said at the WEO press conference that global economy would grow by 3.9 percent in 2018, explaining that the forecast was borne out of the continued strong performance in the Euro area, Japan, China and the United States.
“Emerging and developing economies present a diverse picture. Many of these countries need to diversify their economies to boost future growth and resilience,’’ he said.
Nigeria’s inflation, according to the IMF will remain in double digits in 2018 as it raised concerns over rising public and private debts globally, calling on governments to invest more in people and build up fiscal buffers as well as infrastructure that would not only engender but sustain economic growth.