The International Monetary Fund has raised a fresh alarm on the vulnerability of Nigerian economy.
This time around, the global institution worried that Africa largest economy is sliding into deeper recession as a result of the disruption brought on by COVID-19.
The fund on Wednesday reviewed the Nigerian economy downward from the 3.4 percent it earlier projected in April.
Its outlook indicated that Nigeria’s Gross Domestic Product will shrink by 5.4 per cent in 2020.
While releasing the June 2020 World Economic Outlook, the Fund disclosed that the global economy in 2020 and 2021 would further contract by 4.9 per cent and three percent respectively.
Wednesday forecast represents a downgrade from its April projection of three per cent contraction in 2020 and a recovery of 2.2 per cent in 2021.
It said, “Compared to our April World Economic Outlook forecast, we are now projecting a deeper recession in 2020 and a slower recovery in 2021. We are projecting a synchronised deep downturn in 2020 for both advanced economies and emerging markets and developing economies.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.”
Meanwhile, the Central Bank of Nigeria had reported that Nigeria external reserve has dropped by $261 million under two weeks.
Data from CBN website shows that Nigeria’s external reserve is now $36.3 billion as at June 18th 2020, dropping further from the $36.57 billion it was on June 3.
Observers note that the drop may not be unconnected to limited dollar earnings due to stiff OPEC cuts and low crude oil prices.