Nigeria’s economy breaks down as GDP growth falls to 1.9%

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Nigeria’s economy break's down as GDP growth falls to 1.9%
Nigeria’s economy break's down as GDP growth falls to 1.9%

The nation’s economy grew more slowly in the second quarter of 2019 than it did in the first quarter, the National Bureau Statistics said on Tuesday.

The Gross Domestic Product growth rate fell to 1.94 per cent in Q2 from 2.10 per cent in Q1, the new GDP report released by the NBS showed.

The NBS said during the quarter, aggregate GDP stood at N34.94tn in nominal terms, an increase of 13.83 per cent over the performance in the second quarter of 2018 and 9.8 per cent over the preceding quarter.

It said, “The performance observed in Q2 2019 follows an equally strong quarter performance, and was likely aided by stability in oil output as well as the successful political transition.

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“Overall, a total of 15 activities grew faster in Q2 2019 relative to last year, while 13 activities had higher growth rates relative to the preceding quarter. On a half-year basis, real growth in the first half of 2019 stood at 2.02 per cent, higher than in 2018 which was 1.69 per cent. Quarter on quarter, real GDP increased by 2.85 per cent compared to  a decline of 13.69 per cent in the preceding period.”

A global credit rating agency, Fitch Ratings, said in June that the Nigerian economy would continue to experience a sluggish recovery, predicting that the GDP growth would average 2.2 per cent in 2019-2020, below its previous 10-year average of 4.2 per cent and the current ‘B’ median of 3.4 per cent.

It said high unemployment and inflation would constrain private consumption while investment was held back by tight credit supply, a weak business climate and regulatory uncertainty in the oil sector.

Another rating agency, Moody’s Investors Service, also said in June that Nigeria was trapped in a low growth path for the time being.

The Vice President – Senior Credit Officer, Sovereign, Aurelien Mali, said government revenue weakness remained a key credit challenge, adding that the country’s balance sheet had deteriorated to a worrisome level.