WED, JANUARY 09 2019-theG&BJournal- Official figure released yesterday by the World Bank confirms that Nigeria’s economy will end the year stronger.
Gross Domestic product is expected to rise to 2.2 percent in 2019- assuming that oil production will recover and a slow improvement in private demand will constrain growth in the non-oil industrial sector.
The report however warned that domestic risks, in particular, remain elevated.
‘’Political uncertainty and a concurrent weakening of economic reforms could continue to weigh on the economic outlook in many countries, including Nigeria,’’ the Bank said.
The January edition of the 2019 Global Economic Prospects (GEP) was released yesterday in Washington. Key message for Africa is that regional growth is expected to accelerate to 3.4 percent in 2019, predicated on diminished policy uncertainty and improved investment in large economies together with continued robust growth in non-resource intensive countries.
Per capita growth is forecast to remain well below the long-term average in many countries, yielding little progress in poverty reduction.
Growth in Nigeria picked up to 1.9 percent but oil production fell mid-year and non-oil activity was dampened by lackluster consumer demand and disputes that disrupted crop production.
The World Bank projection is a whisker below the recent Renaissance Capital’s oil and gas team calculation which projects GDP growth in 2019 of 2.5% for Nigeria.
The team say it maintains its 2019 Brent oil price forecast of $65/bl- ‘’with this assumption in mind (and factoring in that many growth estimates might have been made with $70/bl in mind), we see downside risk to the 2019 outlook.’’
The projections also confirm various reading that economic recovery is picking up pace must faster than expected. Purchasing Managers’ Index (PMI) survey for 2nd half of 2018 reflected rising consumer demand.
According to the National Bureau of Statistics, industrial growth rose from 0.7 percent y/y in Q2’18 to 1.9 percent y/y in Q3’18, supported by moderating costs pressures and continuing foreign exchange stability during the quarter.
Manufacturing composite PMI was 57.9 index point in November, higher than 56.8 index point in the preceding month. It was the twentieth consecutive expansion with new orders and production volume expanding to 58.1 and 59.9 in November (from 56.8 and 58.9 in October) respectively – despite the rise in output prices.
Stock of raw materials also increased to 58.7 in November (from 56.2 in October) amid increased sales and shortened supplier delivery time due to greater efficiency of suppliers, to 56.9 (from 56.4).
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