Mastercard’s 2025 Economic Outlook for Nigeria: Navigating Through Change

The Mastercard Economics Institute’s 2025 Economic Outlook forecasts Nigeria’s GDP growth at 2.9%, consumer spending to rise by 6%, and inflation to moderate to 22.1%. Key highlights include the significant impact of remittances on the economy, the challenges posed by high inflation, and the ongoing digitization of payment systems to enhance financial inclusion.

The Mastercard Economics Institute has published its annual report, ‘Economic Outlook 2025’, which outlines the economic trajectory for Nigeria. The report anticipates a 2.9% growth in the nation’s GDP year over year, while consumer spending is projected to rise by 6%. Despite these positive indicators, consumer price inflation is expected to remain high at 22.1%, presenting ongoing challenges for families and businesses.

Nigeria’s economic expansion is largely attributed to strong remittance inflows, which are vital for maintaining household incomes and driving consumption. The nation’s resilience is noteworthy as it adapts to global economic shifts by harnessing human capital and its remittance ecosystem. “Nigeria’s economic outlook for 2025 highlights the country’s resilience and potential for growth,” remarked Khatija Haque, chief economist for EEMEA at Mastercard.

The report illustrates the challenges posed by inflation, which affects consumer behavior. Although inflation is projected to moderate from over 33% in 2024 to 22.1% in 2025, it remains a key concern. High inflation influences consumers to prioritize essential goods, limiting discretionary spending despite the projected growth in consumer expenditure.

Migration trends significantly impact Nigeria’s economy, generating substantial remittance flows crucial for low- and middle-income families. As reported by the World Bank, global remittance levels have surged dramatically, with growth expected to continue alongside local economic reforms. These remittances, alongside the digitization of the payment sector, promote efficiency and convenience in financial transactions, allowing for more secure and accessible means of support for communities.

Mobile money and digital payment solutions have streamlined remittance processes, enhancing financial inclusion for underserved populations in Nigeria. These developments promote active participation in the economy, aiding both individuals and businesses. The ‘Economic Outlook 2025’ report utilizes a range of data sets, including Mastercard’s sales activity, to provide a comprehensive economic forecast.

In summary, the Mastercard Economics Institute’s 2025 Economic Outlook for Nigeria presents a nuanced portrait of an economy poised for modest growth amidst significant inflationary pressures. While GDP is projected to grow and consumer spending is expected to increase, high inflation remains a critical concern. The role of remittances continues to be pivotal, driving economic resilience and influencing consumer behavior. Efforts to enhance digital payment systems are expected to further foster financial inclusion, encouraging participation in Nigeria’s economy.

Original Source: www.mastercard.com