In a meeting with the media yesterday, World Bank Group President David Malpass provided the forecast ahead of the Spring Meetings of the World Bank and International Monetary Fund (IMF).
The prediction was a sneak peek into the April World Economic Outlook, which was scheduled to be released this afternoon.
Malpass explained that the revisions to the upward projections are based on advanced economies performing “somewhat better than expected” in the first month of this year and China ending its lockdown policy.
The head of the World Bank stated that the United States’ gross domestic product (GDP) is anticipated to expand by 1.2% this year, as opposed to the 2.1% that was recorded the previous year.
The most recent banking stress, which, according to him, “dampens activity” and raises concerns about growth prospects, is one of growth’s drawbacks.
The banking crisis will be a major topic of discussion at the Spring Meetings, where stakeholders are expected to investigate the potential impact of failed banks on the global financial system.
The financial system’s stability and its ability to weather the storm in the face of prolonged economic challenges have been questioned in light of the back-to-back bank collapses in the United States and the rising tension in Switzerland.
Experts have urged central banks to prioritize financial system stability and slow or stop interest rate increases. However, the Federal Reserve System continued to raise interest rates at its March meeting despite expanding the liquidity line to save the banking sector.
The aggressive rate increase is already showing up in data all over the world, as evidenced by the labor market in the United States showing signs of weakness in March.
Nigeria’s maximum lending rate has surpassed 28%, and Nigeria’s monetary policy rate (MPR) has reached a multi-decade high of 18%.
Specialists said the loan cost would should be evaluated descending to give the confidential area headroom. Manufacturing and agriculture are the nation’s output growth albatross because credit to the real sector has stalled or grown at a snail’s pace over the past decade.
The bank cut Nigeria’s growth forecast in January from 2.9% to 2.9% because of the country’s rising risks and poor performance in key sectors like petroleum.
However, its sister organization, the IMF, increased its estimate of the country’s output growth from 3% to 3.2%.
Local economists predict that the country’s macroeconomic policies will undergo a significant shift following the leadership change next month, and that the sluggish growth of the past eight years may change significantly.
The Bretton Woods institutions have demanded extensive and bold reforms to the country’s inefficient power sector, rigid foreign exchange market, and unfriendly tax system, which are among the impediments to the country’s ability to accelerate growth.
This week, important financial and monetary authorities will attend the Spring Meetings to discuss the country’s progress in the reform process.