As companies take stocks and close account books, signaling the closing of year 2018 businesses, a London based provider of economic intelligence, FocusEconomics has projected 2.1 per cent growth for the Nigerian economy in 2019.
Sources said it is cheering a news as private and public establishments draw up budget for 2019, an election year for Nigeria.
In its outlook for the Nigerian economy, FocusEconomics says growth is seen strengthening going forward, pointing to the rising oil production, better foreign exchange rate allocation and a pick-up in fiscal spending.
It however stated that political uncertainty is clouding the outlook ahead of the 2019 elections, adding that “In 2020, growth is seen rising to 2.6%.”
This was as the group of international economists says they expect headline inflation to stand on the average of 12.2 per cent in 2019, which is unchanged from last month’s forecast. In 2020, inflation is seen averaging 11.4 per cent.
If it goes as predicted by the economic intelligence team, the possible implication is that the Monetary Policy Committee of the Central Bank of Nigeria would continue to hold its Monetary Policy Rate (MPR) at its current 14 per cent. The central bank had announced a single inflation digit as a key panacea for reduction of the official interest rate.
Nigeria’s Gross Domestic Product (GDP) expanded 1.8 per cent annually in the third quarter (Q3) of 2018, according to data released by the National Bureau of Statistics (NBS) last week. The figure is above Q2’s 1.5 per cent increase, although still below market expectations of a stronger pick-up to around 2.0 per cent. Experts say the economy’s recovery regained some lost momentum in the third quarter, after growth fell to a one-year low in the second quarter.
Similarly, FocusEconomics Consensus Forecast panelist forecasts fixed investment growth for Nigeria to reach 1.9 per cent in 2019. The firm projects fixed investment to increase to 2.2 per cent in 2020.
The panelist which says weaker growth in new orders and output drove October’s moderation in Purchasing Managers Index (PMI), predicted “fixed investment growth to reach 2.2% in 2019, which is unchanged from last month’s forecast. In 2020, fixed investment is seen increasing 1.7%.”
The group also remarked in the new outlook that inflationary pressures built in October, with input cost inflation and output prices rising. On a bright note, firms added jobs for the 18 consecutive months in October, it said.
