In its latest Article IV consultation released on Wednesday, July 2, the IMF projected that Nigeria’s fiscal deficit could hit 4.7 percent of GDP, well above the government’s estimate.
It blamed declining oil prices, low production, and execution challenges as key threats to budget performance.
“The 2025 budget was based on optimistic hydrocarbon revenue projections, even before the price decline since April,” the report stated.
It also cautioned that if savings from fuel subsidy removal, estimated at two percent of GDP, are not realised by the second half of 2025, expenditure cuts may become inevitable.
