Dismal Oil Sector Suppressed Economic Growth
The National Bureau of Statistics (NBS) recently published its Gross Domestic Product (GDP) report for Q2:2023. Despite economic headwinds, the economy sustained its positive momentum for the eleventh (11th) consecutive quarter since the pandemic-induced recession in H2:2020. GDP printed at 2.51% YoY (vs. 2.31% in Q1:2023; 3.54% YoY in Q2:2022).
In Q3:2023, we expect GDP to witness a slowdown given the impact of the removal of Premium Motor Spirit (PMS) subsidy and the FX liberalization on economic activities. We expect that elevated energy prices, interest rates and recent FX pressures will negatively impact manufacturers in the non-oil sector. Furthermore, we opine that persistent inflationary pressures would affect consumers’ purchasing power and ultimately the growth of the trade sector. In this light, we expect growth to range between 1.51% to 2.95%.
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