World Bank forecasts 2.2% growth for Nigeria in 2019

The World Bank has estimated the growth rate for Nigeria’s economy in 2019 at 2.2 percent although its forecast oil price at average $67 per barrel for the current year and next year is down by $2 from its projections last June.

Through its Global Economic Prospects report, the Bank said, growth in Sub-Saharan Africa is expected to pick up to 3.4 percent in 2019 which will rise to an average of 3.7 percent in 2020-21.

According to the report, the projection is predicated on diminished policy uncertainty and improved investment in large economies, together with continued robust growth in non-resource intensive countries. It however noted that external headwinds have intensified as growth among main trading partners moderates, global financial conditions tighten, and trade policy uncertainty persists.

The report further revealed that: “ Economic growth in Nigeria is projected to rebound to 2.2 percent in 2019 and 2.4 percent in 2020-21.

These predictions are unchanged from June and assume that oil production will recover, but peak below government targets, while a slow improvement in private demand will limit growth in the non-oil industrial sector.”

The World Bank also said that global economic growth will slow down to 2.9 percent in 2019 from 3.0 per cent in 2018, as international trade and investment weaken.

Global financing conditions have tightened, industrial production has moderated, trade tensions have intensified, and some large emerging market and developing economies have experienced significant financial market stress.” Last year, the average prices of oil is $68 per barrel, slightly lower compared to what the bank forecasted from June 2018, but 30 percent higher than the average price of oil in the year 2017.

“In 2019 and 2020, oil prices are expected to average $67/bbl, $2/bbl lower than June projections; however, the uncertainty around the forecast is very high,” the World Bank said in its January 2019 Global Economic Prospects report.

This year, oil demand growth is expected to stay robust, but expected slowdown in emerging market and developing economies (EMDEs) “could have a greater impact on oil demand than expected,” the World Bank said.