Another dismal set of GDP numbers

Proshare

Thursday, November 19, 2015 10:55AM / FBNQuest Research                                               

The latest national accounts from the NBS show that GDP growth (at constant basic prices) picked up slightly to 2.8% y/y in Q3 2015 from 2.4% the previous quarter. These are still very poor figures.

The global macro headwinds have not improved although Q3 was marked by better security in the north east and was spared from the earlier distraction of elections.

Non-oil growth slowed to 3.1% y/y from 3.5% in Q2, which highlights the challenge of diversification for the newly-appointed administration.

The oil economy expanded by 1.1% y/y, having contracted by -6.8% in Q2. The NBS reports that average crude output increased to 2.17 mbpd from 2.05 mbpd.

We hope that this reflects a lasting achievement by the new order in improving security in the Niger Delta and stemming production leakages (losses).

Services were the strongest performer in Q3, including contributions from finance/insurance (6.6% y/y), information/communications (5.3% y/y) and professional, technical and scientific services (5.4% y/y).

Trade, the second largest sector (after agriculture), grew by 4.4% y/y. Unidentified other services expanded by 16.4% y/y.

Public administration again contracted, by -12.8% y/y (-10.6% in Q2).



For Q4 we see a pick-up in growth to around 4.0% y/y on the basis of firmer household demand for the seasonal festivities.

It would be too early to expect much impact from the policies of the new administration until 2016, notably its plans for a much larger and more targeted budget.

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