By Ademola Alawiye

Tuesday, 8 Feb 2011

Analysts at the First Security Discount House have said that the current fiscal position of the Federal Government should not exert excessive demand pressure on foreign exchange. They said that foreign exchange would remain stable in the short to medium term.

The analysts stated at the FSDH Weekly Nigeria Capital and Money Market Report, that there was no risk in the country’s external position in the medium term.

The report, however, stated that the growth in the Nigerian economy was not favourable due to some economic problems.

It said, “Although the Nigerian economy is one of the fastest growing in the world, FSDH research is of the opinion that the growth is sub-optimal given the hindrances to sustainable growth inherent in the economy.”

The report added, “For Nigeria, the World Bank forecasts a gross domestic product growth rate of 7.1 per cent and 6.2 per cent for 2011 and 2012 respectively. The 2011 forecast is slightly lower than the International Monetary Fund growth rate forecast of 7.4 per cent in its world economic outlook. IMF has earlier linked the revised growth on the pickup in global demand and the strengthening of oil prices.

It added that Nigeria continued strong growth in the non-oil sector was being supported by increasing oil production which was a result of reduced instability in the Niger Delta region.

Source: Punch