Post Views: 416 Barely one day after the International Monetary Fund (IMF) published its January 2019 World Economic Outlook (WEO) projecting that Nig...
Barely one day after the International Monetary Fund (IMF) published its January 2019 World Economic Outlook (WEO) projecting that Nigeria’s economy would grow at 2.0% this year and 2.2% next year, the Central Bank of Nigeria (CBN), on Tuesday forecast a 2.28% growth for the nation’s GDP.
This is even more robust than the World Bank’s 2.2% forecast.
In a communiqué at the end of its Monetary Policy Committee (MPC) meeting on Tuesday, January 22, 2019, the CBN based its positive outlook for the domestic economy on the “fiscal stimulus from increase in oil and non-oil receipts to support the Federal Government’s Economic Recovery and Growth Plan (ERGP).”
Key headwinds to these forecasts were however listed to include the “softening oil prices, persistent security challenges arising from insurgency in the North East and herdsmen attack in some parts of the country and perceived political risks associated with the 2019 general elections.”
It expects that inflation in the first half of 2019 would be “mixed, with the expectation of an increase in the near-term before a gradual decline towards the mid-year.
“Inflation is expected to rise marginally amidst palpable tailwinds, which include increased spending preparatory to the 2019 general elections and continued disruptions to the food supply chain in the insurgency prone areas and herdsmen attack regions of the country,” it added.
The committee expressed satisfaction with the performance of the nation’s economy in
2018, highlighting of which included “stability in the exchange rate, stable accretion to external reserves, moderation in inflation and the low but gradual improvement in real GDP growth in the last six consecutive quarters commencing from Q2 2017.”
This, members noted, is important, in the face of global uncertainties and domestic challenges.
While commending the government’s increased budgetary spending on infrastructure, members urged the Federal Government to sustain the pace so as to address infrastructural deficit in the country.
Although the immediate impact of the increased spending on Nigeria’s GDP may be slow in coming, the committee assured that it “will eventually expand the economy’s productive base, reduce unemployment and increase aggregate demand in a more sustainable manner and over a long period of time.”
Members “acknowledged the strategic role of the private sector in economic growth and remained concerned over the slow growth in credit to the private sector through 2018, noting the sudden increase at end December 2018.”