Nigeria’s economy seen shrinking in Q1 after exiting recession
The Nigerian economy is estimated to have contracted by 0.5 percent in the first quarter of this year after a surprise exit from recession in the fourth quarter of 2020.
The GDP report for Q1 2021 is slated to be released by the National Bureau of Statistics on Monday. The country snapped out of recession in Q4 2020 as the GDP expanded slightly by 0.11 percent, with annual real GDP growth of -1.92 percent.
Nigerian slipped into recession in Q3 2020 as the GDP contracted by 3.62 percent after shrinking by 6.10 percent in Q2.
Last Monday, the NBS disclosed that the headline inflation for April fell slightly to 18.12 percent from 18.17 percent in March.
Analysts at Financial Derivatives Company Limited said in their latest economic bulletin that all eyes would be on the Monetary Policy Committee of the Central Bank of Nigeria at their meeting next week to see their reaction to the unexpected drop in inflation.
They said, “The GDP numbers are scheduled for release on May 24. We are projecting a mild contraction of 0.5 percent. Our view is that the committee would maintain its current stance and watch the indicators closely.
“This is because inflation is likely to increase again in the month of May due to output shocks and supply chain disruptions as a result of heightening insecurity. This will be compounded by exchange rate pressures and higher logistics costs.”
