Respondents to the Central Bank of Nigeria’s (CBN’s) March 2018 Business expectations survey have expressed greater optimism on economic conditions for the month of April and beyond.
The respondents positions is indicative of an improved outlook for economic expansion in Nigeria and their sentiment is echoed by several international organizations who expect a stronger pace of expansion for the Nigerian economy in 2018.
Specifically, the International Monetary Fund (IMF), the World Bank and the Institute of International Finance (IIF) have respectively forecast 1.9 percent, 2.5 percent and 2.2 percent real GDP growth rates for the economy representing a modest recovery from the 0.8 percent recorded in 2017.
“Whilst we note the underlying factors responsible for these expectations – stronger oil prices and production levels, relative FX stability, improving business environment, as well as anticipated economic boost from fiscal spending – respondents to the survey believe that age-old constraints such as power supply and high interest rates among others could cap the pace of expected growth,” analysts at Vetiva Capital noted.
- The ghost chasing Nigeria’s economy: Consequences of subsidy regime
- SEC to stop unregistered CMOs from business operation from the end of May
- Savings, investments, economic growth amidst inflation
- Technology growth will create more jobs for Nigerians, says Cedarview…
- Renewables, global energy’s biggest sources constitute only one-third in…
They added that in line with the general optimism for the year, they forecast a 2.4 percent real GDP growth for 2018.
Commenting on market activities for the week, the Vetiva analysts foresee healthy liquidity spurs and steep decline in yields.
They said with the CBN refraining from any liquidity mop up at week open, saw interbank call rate declining 67bps to settle at 2.33 percent with bulls ruling the T-bills space largely buoyed by healthy system liquidity, which drove yields 101bps lower on average Monday.
“Bullish sentiment was similarly strong in the bond market as yields on benchmark notes moderated 21bps on average.
“We expect healthy system liquidity (₦476 billion) to support further bullish sentiment Tuesday, albeit tempered by any CBN liquidity mop up,: they noted.