The World Bank on Sunday said that Nigeria’s recession will come to an end soon and that positive growth is expected to resume in 2017.
The country has been struggling with recession months after Muhammadu Buhari emerged President in May 2015. Buhari who is currently in London on medical vacation has focused most of his attention on fighting anti-corruption.
“Commodity exporters Argentina, Brazil, Nigeria and Russia will see recessions end and positive growth resume this year,” World Bank President Jim Yong Kim said in a statement.
World Bank has also maintained its forecast that global growth will improve to 2.7 per cent this year, citing a pickup in manufacturing and trade, improved market confidence and a recovery in commodity prices.
The update of the multilateral development lender’s Global Economic Prospects report marked the first time in several years that its June forecasts were not reduced from those published in January due to rising growth risks.
The World Bank’s 2017 global growth forecast of 2.7 percent compares to its 2.4 percent estimate for 2016, a figure that was increased by a tenth of a percentage point since January.
The World Bank said advanced economies were showing signs of improvement, especially Japan and Europe, while the seven largest emerging markets – China, Brazil, Mexico, India, Indonesia, Turkey and Russia – were again helping to drive global growth.
“With a fragile but real recovery now under way, countries should seize this moment to undertake institutional and market reforms that can attract private investment to help sustain growth in the long term,” Kim said.
The bank boosted its 2017 growth forecast for Japan by 0.6 percentage point since January to 1.5 percent, while the euro zone’s forecast was increased by 0.2 percentage point to 1.7 percent. In both cases, a pickup in exports and unconventional monetary easing are helping to support growth.
The World Bank said U.S. growth also is improving but it shaved 0.1 percentage point off its forecast for 2017 to 2.1 percent after weak growth early in the year caused by a pullback in consumer spending it viewed as temporary. It slightly lifted its 2018 U.S. growth forecast to 2.2 percent.
It left unchanged its forecast that China’s growth would slow to 6.5 percent from 6.7 percent last year.
But the World Bank warned that new trade restrictions could derail the recovery in trade that is benefiting many advanced and developing economies, citing actions being contemplated by the Trump administration.
Such restrictions could fall disproportionately on China and other Asian economies, the bank said.
“Significant disruption to China’s exports would undermine its growth with large spillovers on the region,” the bank said in the report. “Furthermore, trade-restricting measures in the United States could trigger retaliatory measures.”
It said exports and investment in Mexico also could be negatively affected by the looming renegotiation of the North American Free Trade Agreement, causing spillovers to Central America as well.