Economic Brief: Q3 2017 Review

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GLOBAL ECONOMIC REVIEW

The world economy posted an improved growth in the H1 2017, with advanced economies benefiting from loosed monetary conditions and tightening labor markets while emerging economies made the most of a recovery in commodity prices and resilient dynamics in China. Data from the International Monetary Fund (IMF) shows that growth was 3.2% (year-on-year) in Q2, thereby marking the highest growth in two years and coming in marginally above the 3.1% expansion recorded in Q1. The global upswing in economic activity has led to revision of earlier projections for global growth now expected to rise to 3.6% in 2017 and 3.7% in 2018…

NIGERIAN ECONOMY REVIEW

The Nigerian economy is in recovery trough having seen a positive growth of 0.55% in Q2 2017 after a run of prior five consecutive quarters of negative growth. The biggest driver of growth was oil and gas sector. The sector bolstered by improved crude oil production as result of relative peace in the oil rich region of the Niger-Delta, grew by 1.64%, representing 13.26% growth relative to rate recorded in comparable period of 2016. On a quarter-on-quarter basis, it grew by 7.52% and contributed 8.89% to total real GDP.  Meanwhile, oil production estimate averaged at 1.84 million barrels per day (mbpd), 0.15 million barrels higher than average production recorded in Q1 2017…

The Equity Market Space   

The Nigerian stock exchange continues to trade on positive momentum driven by recent economic data and expectation that the fiscal authority will stay on course with implementation of the medium term ERGP to the letter. This provided fillip in the investment space and helped pushed the All-Share Index (ASI) to 31.87% growth as at 30th of September, 2017…

Outlook the rest 2017

  • We expect the Q3 earnings season to impact positively on the market, especially, if numbers beat market expectations.
  •  We think that conscious fiscal policy direction from the government would further strengthen economic recovery and market fundamentals.
  •  We expect GDP to average between 1.0% and 1.5% in 2017.
  •  We expect interest rate to reduce to 12% from the current 14%. Our expectation is that the MPC will shift from fighting inflation to economic growth having seen a wane in inflation pressure.
  •  Our inflation forecast for 2017 is however at 15.6%.

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