Culled—Proshare
January 31, 2018/FSDH
- FSDH Research forecasts a Real Gross Domestic Product (GDP) growth rate of 3.16% in 2018
- The 2018 GDP growth rate would be the highest since 2015
- The expected growth in the economy, though still fragile, has relatively reduced the inherent risks in the business environment.
- This will stimulate economic activities in Agriculture, Trade, Mining and Quarrying, Information and Communication Technology, Education, Real Estate, Construction and Manufacturing sectors.
- The need for monetary policy easing will continue to grow as the risks affecting price stability in the economy decrease. This will make cheaper funds available for bankable projects.
- The drop in the yields on the Federal Government of Nigeria’s securities will pave the way for more issuance of Corporate Bonds and Commercial Papers to fund long-term expansion and short-term working capital requirements.
- This will also lead to lower financing cost for corporates and profitability will increase
- FSDH Research notes that there are downside risks to the forecast growth
- The rising social unrest in some parts of the country may affect economic activities and lead to escalating inflation rate
- External factors that can lead to a significant drop in the crude oil price may have adverse impact on the economic activities in Nigeria
- There could be capital flight out of Nigeria if there are excessive hikes in the interest rates in the advanced economies.
Please click here to download the full report from FSDH.