Nigeria’s Gross Domestic Product (GDP) is projected to expand modestly by 3.4 per cent in 2025, supported by higher crude oil production and stronger performance in finance and insurance, construction, ICT and real estate sectors.

Professional services firm PwC Nigeria, which made this projection in its ‘Mid-Year Review and Updates: H2 2025 Economic Outlook’ released on Tuesday, also projected headline inflation to moderate to 21.46 per cent in 2025.

The publication, which was made available to The Nation, provides updates on key issues outlined in PwC’s 2025 outlook, and presents its forecast for the second half of the year.

PwC’s report also highlights essential actions for government and business leaders to thrive amid current economic challenges and emerging opportunities.

PwC, in the report, said the moderation in Nigeria’s headline inflation reflects tighter monetary policy and improved stability in the foreign exchange market.

It also stated that with inflation on a downward trajectory, the Central Bank of Nigeria (CBN) may begin a gradual easing of its monetary policy stance in H2 2025.

PwC further stated that the naira is expected to remain broadly stable through 2025, underpinned by ongoing CBN reforms and improved portfolio inflows.

Fiscal sustainability risks are also expected to persist, driven by weak revenue mobilization and elevated debt service obligations.

Authored by Partner, Chief Economist and Strategy&Lead, West Africa, Olusegun Zaccheaus, and Associate Director, PwC Nigeria, Akolawole Odunlami, PwC’s economic outlook for H2 2025, however, outlined a number of strategic imperatives for governments and business leaders.

The report, for instance, outlined six actionable strategic recommendations for the Nigerian government to undertake amid current economic challenges and opportunities.

Accordingly, PwC recommended strengthening fiscal sustainability by prioritising debt management by aligning spending with revenue, improving fiscal discipline, and accelerating the implementation of tax reforms to reduce reliance on borrowing.

It also stressed the need to enhance monetary policy coordination, by maintaining a disciplined monetary stance to curb inflation and stabilise the naira, while ensuring that credit flows to productive sectors.

PwC also urged government to proactively respond to domestic and global risks, by developing adaptive strategies to mitigate geopolitical, trade, and climate-related risks, while leveraging megatrends like AI, digitalisation, and green finance to future-proof the economy.

For business leaders, the report said they can thrive by embracing five strategic imperatives, including leveraging emerging FX stability, but by staying adaptive; prioritizing cost efficiency and financial discipline; and strengthening risk management and scenario planning.

Other strategic imperatives for business leaders, according to PwC, include embracing digital and operational transformation, and engaging actively with policy and regulatory changes.