Growth in Nigeria-other economies to slow amid more uncertainties

The International Monetary Fund (IMF) has insisted that economic growth around the world is expected to slow as global economies smart from the effect of the Russia-Ukraine war.

According to the global lender, as the world continues to recover gradually from the pandemic, downside risks have begun to materialize.

Highlighting the higher-than-expected inflation and China’s slowdown due to COVID-19, the Fund said it has led to a contracted in global output in the second quarter of this year.

Despite slowing activity, global inflation has been revised up, in part due to rising food and energy prices. Inflation this year is anticipated to reach 6.6 percent in advanced economies and 9.5 percent in emerging market and developing economies—upward revisions of 0.9 and 0.8 percentage points respectively—and is projected to remain elevated longer. Inflation has also broadened in many economies, reflecting the impact of cost pressures from disrupted supply chains and historically tight labor markets.

To address this, the multilateral lender urged Central Banks to target bringing down inflation rates.

In a bid to fight inflation, the Central Bank of Nigeria (CBN) had in its Monetary Policy Committee (MPC) meeting raised interest rate to 14 per cent

“Inflation at current levels represents a clear risk for current and future macroeconomic stability and bringing it back to central bank targets should be the top priority for policymakers,” the Fund said.

The Bretton Wood Institute pointed out that tighter monetary policy will inevitably have real economic costs, but delaying it will only exacerbate the hardship. Central banks that have started tightening should stay the course until inflation is tamed.