The World Bank has stated that monetary policy tightening by the Central Bank of Nigeria (CBN) may not prove adequate to stem the spiralling inflation in the country as anticipated by analysts.
The financial institution made this known in a report titled, “Global Economic Prospects” on the outlook for the rest of 2024 and 2025.
In the report, the World Bank pegged Nigeria’s economic growth rate at 3.3 per cent in 2024 same as its projection at the beginning of the year.
Furthermore, the bank projected Nigeria’s GDP to grow at 3.5% in 2025.
It explained that growth will pick up from the 2.9% recorded in 2023 due to the effect of the current administration’s reforms in the petroleum and forex exchange sector. However, the report noted that the failure of monetary policy tightening by the Central Bank of Nigeria (CBN) remains a risk to the outlook.
The Central Bank of Nigeria (CBN) since this year has increased interest rates by a combined 750 basis points.
The report stated, “After the macroeconomic reforms’ initial shock, economic conditions are expected to gradually improve, resulting in sustained, but still-modest growth in the non-oil economy. In addition, the oil sector is expected to stabilize as production somewhat recovers.”
“Risks to Nigeria’s growth outlook are substantial, including the possibility that the tightening of monetary policy stops short of reining in inflation,” it added.
