The Nigerian economy is still reeling from multiple challenges in spite of the welcome news of a slide in the rate of inflation and the passage of the PIA. The price of Brent is now down to a 3-month low of $65pb and consumer confidence is plunging. However, the stock market has reported more positive trading days in the last fortnight than earlier periods. Therefore, as we go into the final month of Q3 and investors are expectant of a higher Q2 GDP number to be released on August 26, 2021, there is some light at the end of the economic tunnel. It is still widely believed that annual GDP will come in at 2.25-2.5%. The only fly in the ointment may be the surge in covid 19 (Delta) infections, which is rising at an alarming rate.
The monetary policy committee will be meeting in September and is widely expected to maintain the status quo again. The receipt of $3.35bn by Nigeria on August 23 as its share of special drawing rights from the IMF will boost the level of the gross external reserves towards $37bn. This accretion will support the value of the naira in the forex markets and help restore investor confidence.
In this edition of the FDC Monthly publication, the FDC Think-Tank analyzes these issues and their implications on businesses and the economy at large.
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