The International Monetary Fund (IMF) has upgraded its forecast for Nigeria’s economic growth in 2026 to 4.2 per cent from the 4.1 per cent projected in July, while warning that rising food and energy prices could worsen poverty and food insecurity.
The revised projection was contained in the IMF’s October 2026 edition of its World Economic Outlook, titled Resilience Under Strain, Urgent Choices, released on Monday at the ongoing IMF and World Bank annual meetings in Bangkok, Thailand.
According to the Fund, Nigeria’s economic performance is being supported by improved macroeconomic stability and favourable terms of trade. However, it cautioned that rising prices of essential commodities could further intensify the cost-of-living crisis facing vulnerable households.
The IMF said higher food and energy costs were placing disproportionate pressure on households, urging policymakers to balance immediate support for vulnerable citizens with the need to maintain medium-term fiscal stability.
The institution also projected that Nigeria’s economy would expand by 4.3 per cent in 2027, indicating a modest improvement in growth prospects over the next year.
Global Economic Outlook
Despite the improved outlook for Nigeria, the IMF warned that the global economy was facing increasing pressure from geopolitical tensions, rising commodity prices and uncertainty surrounding investments in artificial intelligence.
The Fund projected global economic growth to slow from 3.5 per cent in 2025 to 3.1 per cent in 2026 before recovering to 3.4 per cent in 2027.
It attributed the expected slowdown partly to higher energy and commodity prices, persistent trade tensions and the risk of disruptions to global supply chains.
The IMF also projected global headline inflation to rise from 4.1 per cent in 2025 to 4.7 per cent in 2026 before declining to 4.1 per cent in 2027, largely reflecting higher energy and food prices.
Speaking on the global outlook, the IMF’s Economic Counsellor and Director of the Research Department, Sylvana Tenreyro, said the global economy had demonstrated resilience but warned that the capacity to withstand repeated shocks was becoming increasingly limited.
She called on governments to strengthen their economic resilience, rebuild fiscal buffers and improve their capacity to withstand future disruptions.
Warning Over Artificial Intelligence Investment
The IMF also raised concerns about the risks associated with the rapid expansion of artificial intelligence-related investments.
Although the technology boom has supported investment and economic activity in some markets, the Fund warned that excessive optimism about future profitability and productivity could trigger a sharp market correction.
Such a development, it noted, could reduce investment, destabilise equity markets and tighten financial conditions, with consequences for economies connected to global technology supply chains.
The institution therefore urged governments to strengthen financial oversight, maintain sound monetary policies and promote sustainable private-sector growth.
Call for Targeted Support
The IMF stressed that governments must balance economic stability with measures to protect vulnerable households from rising living costs.
For Nigeria, the warning highlights the challenge of translating improving macroeconomic indicators into tangible improvements in citizens’ welfare.
While the upgraded growth forecast suggests a stronger economic outlook, persistent increases in food and energy prices could undermine household purchasing power and deepen hardship among low-income earners.
The Fund maintained that restoring fiscal space, strengthening supply-side resilience and protecting economic stability would be essential to sustaining growth amid global uncertainty.