The International Monetary Fund has raised Nigeria’s economic growth forecast, projecting a 3.9 per cent expansion in 2025 and 4.2 per cent in 2026.

The updated outlook, released on Tuesday at the launch of the World Economic Outlook 2025 during the World Bank and IMF Annual Meetings in Washington, D.C., marks an improvement from the July 2025 estimate of 3.4 per cent.

According to the IMF, the 0.5 percentage point upgrade reflects growing confidence in Nigeria’s reform-driven economic rebound.

The Fund also forecast that Nigeria’s economy will expand by 4.2 per cent in 2026, up from its earlier July projection of 3.2 per cent.

With the revised outlook, Nigeria is expected to outperform South Africa but remain slightly below the overall Sub-Saharan African regional average.

The report shows that South Africa’s growth forecast was slightly raised from 1.0% to 1.1% for 2025 but trimmed from 1.3 per cent to 1.2 per cent for 2026. In contrast, Sub-Saharan Africa’s outlook improved modestly to 4.1 per cent in 2025 and 4.4 per cent in 2026, up from 4.0 per cent and 4.3 per cent, respectively.

The IMF attributed Nigeria’s upward revision to supportive domestic conditions, including higher oil output, improved investor sentiment, and a stronger fiscal outlook projected for 2026.

“The Fund noted, “Whereas growth in Nigeria is revised upward on account of supportive domestic factors, including higher oil production, improved investor confidence, a supportive fiscal stance in 2026, and given its limited exposure to higher US tariffs, many other economies see significant downward revisions because of the changing international trade and official aid landscape,” IMF stated.

Globally, the IMF forecasts growth to ease to 3.2 percent in 2025 and 3.1 percent in 2026—slightly higher than the July 2025 WEO update but still 0.2 percentage points below projections made before recent global policy changes.

“This is an improvement relative to the July WEO Update—but cumulatively 0.2 percentage point below forecasts made before the policy shifts in the October 2024 WEO, with the slowdown reflecting headwinds from uncertainty and protectionism, even though the tariff shock is smaller than originally announced,” IMF said.

The report adds that advanced economies are projected to grow by about 1.5 percent over 2025–2026, with U.S. growth moderating to 2.0 percent.

In contrast, the IMF expects emerging markets and developing economies to expand slightly above 4.0 percent during the same period.