The International Monetary Fund (IMF) has downgraded its base case, indicating that growth will likely fall from 6.1% in 2021 to 3.2% in 2022.
Its World Economic Outlook (WEO) for July 2022, which was made public on Tuesday, shows a 0.4 percentage point decline from the WEO for April 2022.
The IMF described the prognosis as “gloomy and more uncertain,” adding that while risks started to materialize in 2022, a promising recovery in 2021 was followed by increasingly gloomy trends.
It was mentioned that US consumer spending missed estimates in the second quarter of this year, while global output shrank due to downturns in China and Russia.
A number of shocks have struck the global economy, which was already fragile due to the pandemic. These include higher-than-expected inflation rates across the board, particularly in the US and major European economies, which has tightened financial conditions; an even worse-than-expected slowdown in China, which is a result of COVID-19 outbreaks and lockdowns; and additional detrimental effects from the conflict in Ukraine.
The growth rate is expected to decrease from 6.1% in the previous year to 3.2% in 2022, which is 0.4 percentage points less than the World Economic Outlook released in April 2022, according to the IMF’s baseline prediction.
The Fund elucidated that a negative revision of 1.4 percentage points occurred in the US due to tighter monetary policy and poorer growth earlier this year, which decreased consumer spending power.
There have been large global spillovers from China’s growth being revised down by 1.1 percentage points due to additional lockdowns and the worsening real estate crisis, while significant downgrades in Europe are a result of the war in Ukraine and tighter monetary policy.
“Global inflation has been revised upward by 0.9 and 0.8 percentage points, respectively, and is expected to reach 6.6% in advanced economies and 9.5 percent in emerging market and developing economies this year due to persistent supply-demand imbalances and rising food and energy prices.
“Disinflationary monetary policy is anticipated to bite in 2023, with global output expanding by just 2.9%. The prognosis is heavily skewed to the negative, according to the IMF.
According to the report, “European gas imports from Russia may be abruptly stopped due to the conflict in Ukraine; tighter global financial conditions may cause debt distress in emerging market and developing economies; new COVID-19 outbreaks and lockdowns, as well as a further escalation of the property sector crisis, may further stifle Chinese growth; and geopolitical fragmentation may make it more difficult to control inflation and promote global trade and cooperation.”
“A credible alternative scenario would place growth in the lowest 10% of outcomes since threats materialize, inflation increases, and global growth drops to roughly 2.6% and 2.6% in 2022 and 2023, respectively.
As prices continue to rise and pressure people’s standards of living around the world, the IMF recommended that governments focus their efforts on controlling inflation.
The IMF claimed that while actual economic consequences would inevitably result from tighter monetary policy, delaying them would only make them worse.
Targeted fiscal support can help lessen the effects on the most vulnerable, but these measures will need to be balanced by higher taxes or decreased government spending because government budgets are already tight due to the epidemic and the need for a disinflationary general macroeconomic policy stance.
“More stringent monetary policies will impact financial stability as well, necessitating prudent application of macro-prudential instruments and highlighting the increased importance of debt resolution framework modifications,” the IMF stated.
It also suggested that as the pandemic spreads, vaccination rates should increase to protect against future variations and that strategies to address specific impacts on energy and food prices should concentrate on those most affected without distorting pricing.
According to the IMF, immediate multilateral action is still needed to mitigate climate change in order to reduce emissions and increase investments and speed up the green transition.
The PDP spokesman remembered how the opposition party had warned on multiple times that terrorists, “many of whom were imported into our country by the APC,” had gained control over a significant chunk of our nation.
“Terrorists as non-state actors boldly showed their faces, boasting, admitting and confirming their participation in the Kuje Prison break,” the speaker continued, “from the video. Some of them were former prison inmates who were either jailed or awaiting trial for their previous terrorism act against our country.”
Nigerians may also recall Mallam Nasir el-Rufai, the governor of Kaduna State, confessing that the APC government was aware of the terrorists’ plans and whereabouts but did nothing.
It is estimated that between 2020 and 2022, terrorists killed roughly 18,000 Nigerians “as the criminals continue to be emboldened by the failures and obvious complicity of the APC and to which the PDP had always drawn attention.” Ologunagba said.
He declared, “This is not about politics; this is about humanity and leadership, which, regrettably, is lacking in our nation right now.”
In addition, the PDP expressed its disgust at “the pathetic response by the seemingly helpless, naive, and deflated Buhari Presidency,” which informed the nation in agony that President Buhari “has done all and even more than what was expected of him as Commander in Chief by way of morale, material, and equipment support to the military.”
“The APC and the Buhari Presidency are openly admitting their incompetence and failure with this statement. In other countries, during similar circumstances, the president takes the initiative and takes decisive action to save and defend the people.
“When faced with hardship, the President becomes the Consoler-in-Chief, offering the people comfort and hope.”
Painfully, Nigeria does not have a President who cares and can stand as Consoler-in-Chief to the public.
Nigerians must immediately take notice and understand that holding the APC government responsible is the only way to end this terrible circumstance. To oppose the fascist leanings of the APC leadership, we as a people must unite, regardless of our political, racial, or religious connections.
In order to provide guidance on how to address the country’s escalating insecurity, Ologunagba demanded an urgent meeting of the National Council of State.
“Our country cannot collapse. The PDP spokesman said, “The President has, in his own admission, come to his wit’s end. Therefore, we must all revive the resilient Nigerian spirit and ‘can-do-attitude’ to prevail on the President to immediately and without further delay, accede to the demand by the PDP and other well-meaning Nigerians to convene a special session of the National Council of State to find a lasting solution.”
