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…Warns Global Economy At Risk Of Recession If Iran War Persists
ABUJA – The International Monetary Fund (IMF) has projected that Nigeria’s economy will grow by 4.3 percent in 2027. The forecast, contained in the IMF’s latest World Economic Outlook, represents a 0.2 percentage point increase from the 4.1 percent growth projection for 2026.
The new estimate signals rising confidence in Nigeria’s medium-term economic direction as the country continues to navigate reforms under President Bola Tinubu.
Despite the positive outlook for Nigeria, the IMF warned that the global economy faces mounting pressure following the outbreak of war in the Middle East.
It said that if the conflict remains limited in duration and scope, global growth is expected to slow to 3.1 percent in 2026 before edging slightly higher to 3.2 percent in 2027.
The Fund also projected that global inflation would rise modestly in 2026 before resuming its downward trend the following year.
According to the IMF, the impact of weaker growth and higher inflation is likely to be more severe in emerging and developing economies, particularly commodity-importing nations already dealing with structural vulnerabilities.
It added that risks to the global economy remain tilted to the downside, citing the possibility of a prolonged war, worsening geopolitical divisions, trade tensions and slower-than-expected gains from artificial intelligence.
The institution urged governments to adopt policies that improve resilience, strengthen credibility and deepen international cooperation.
IMF Warns World Already Drifting Toward More Adverse Scenario
The International Monetary Fund also cut its growth outlook on Tuesday due to Middle East war-driven energy price spikes but said the world was already drifting toward a more adverse scenario with much-weaker growth as Strait of Hormuz shipping disruptions continue.
With massive uncertainty over the Middle East conflict gripping finance officials gathered for IMF and World Bank spring meetings in Washington, the IMF presented three growth scenarios: weaker, worse and severe, depending on how the war unfolds.
Under the IMF’s worst-case outlook, the global economy teeters on the brink of recession, with oil prices averaging $110 a barrel in 2026 and $125 in 2027.
The IMF chose the most benign scenario for its World Economic Outlook “reference forecast,” which assumes a short-lived conflict and oil prices normalising in the second half of 2026, with an $82 per-barrel average for the year – well below Tuesday’s benchmark Brent crude futures price of around $96.00. Just minutes after releasing the outlook, IMF chief economist Pierre-Olivier Gourinchas said it may be already outdated.
He told reporters that with continued energy disruptions and no clear path to end the conflict, the IMF’s “adverse scenario” looks increasingly likely.
That middle path envisions a longer conflict that keeps oil prices around $100 per barrel this year and $75 in 2027, with global growth falling to 2.5% this year from 3.4% in 2025. “I would say that we are somewhere in between the reference scenario and the adverse scenario,” Gourinchas said.
“And of course, every day that passes and every day that we have more disruption in energy, we are drifting closer towards the adverse scenario.”
Absent the Middle East conflict, the IMF said it would have upgraded its growth outlook by 0.1 percentage point to 3.4%, due to a continued technology investment boom, lower interest rates, less-severe U.S. tariffs and fiscal support in some countries.
The IMF in January had forecast that oil would decline to about $62 in 2026.
The IMF’s worst-case “severe scenario” assumes an extended and deepening conflict and much higher oil prices that prompt major financial market dislocations and tighter financial conditions, slashing global growth to 2.0%.
