Real Household Consumption Expenditure Growth Rate Stood at 0.18% in 2020 - NBS

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Tuesday, April 13, 2021 03:30 PM / by NBS/ Header Image Credit: NBS

 

GDP By Expenditure

The Gross Domestic Product (GDP) can be derived as the value of all goods and services available for final uses and export. GDP at market prices includes net taxes on products; taxes are subtracted to obtain basic price GDP.

 

The expenditure approach measures the final uses of the produced output as the sum of Final consumption, Gross Capital Formation and Exports less Imports, which are considered in turn in this report. Consumption of fixed capital-a measure of depreciation of assets-comprises the difference between Gross Domestic Product (GDP) and Net Domestic Product (NDP) and is also considered in this report.

 

In Q3 2020, the gross domestic product declined in real terms by -3.62% year-on-year but rose to 0.11% in Q4 2020, ending the trend of two quarters of negative growth. For annual 2020, the gross domestic product grew in real terms by -1.92% year-on-year, slower than 2.27% recorded in 2019, and 1.91% recorded in 2018.

 

Household Final Consumption Expenditure:

This consists of expenditure, including imputed expenditure, incurred by resident households on individual consumption goods and services. This is calculated as a residual.

 

General Government Final Consumption Expenditure:

This consists of expenditure, including imputed expenditure, incurred by government at all levels on both individual and collective consumption of goods and services. Individual consumption items are those that are provided to individual households, such as education and health services. Collective consumption items relate to goods and services utilised by society as a whole, such as security and infrastructure.

 

Not for Profit Institutions Serving Households Final Consumption Expenditure:

This consists of expenditure, including imputed expenditure, incurred by Not-for-Profit-Institutions-Serving-Households, which consist of organisations such as charities and non-government organisations.

 

Gross Fixed Capital Formation:

This is measured as the total value of producer's acquisitions, less disposals, of fixed assets during the accounting period, plus certain additions to the value of non-produced assets (such as improvements to natural assets) realised by the productive activity of institutional units.

 

Change in Inventories:

This consists of changes in; stocks of outputs that are still held by units that produced them prior to their being further processed, sold, delivered to other units or used in other ways, measure by the value of the entries into inventories less the value of withdrawals and the value of any recurrent losses of goods held in inventories.

 

Exports of Goods and Services:

This consists of sales of goods and services to residents abroad, from residents within Nigeria

 

Imports of Goods and Services:

This consists of sales of goods and services from residents abroad, to residents within Nigeria

 

Consumption of Fixed Capital:

This represents the reduction in value of the fixed assets used in production during the period, that results from physical deterioration, normal obsolescence or normal accidental damage.

 

GDP Expenditure - Final Consumption Components

 

Household Final Consumption

Household final consumption, in real terms, grew by 6.10% and 16.59% in Q3 and Q4 2020, respectively, on a year on year basis, compared to the -1.98% growth in Q3 2019 and -0.41% growth in Q4 2019. Overall, in 2020, real household final consumption expenditure rose by 0.81% from -1.06% recorded in 2019. On a quarter on quarter basis, real household consumption expenditure grew by 38.85% in Q3 and 20.76% in Q4 2020.

 

In nominal terms, household final consumption expenditure grew by -1.83% in Q3, and -0.71% in Q4 2020, resulting in an annual growth rate of -1.48%. The annual growth rate was -11.33% points slower than recorded in the previous year. On a quarter on quarter basis, growth was recorded at 23.04% in Q3, and 7.68% in Q4 2020, compared to the preceding year's 11.74%, and 6.46% in the corresponding quarters. Household consumption accounted for 63.63% of real GDP at market prices in Q3 2020, and even higher at 70.45% in Q4 2020.

 

Growth in Consumption Components, 2019, 2020  (Real), Percent,%)

 

 

2019

2020

 

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

YoY

Households

-2.68

0.75

-1.98

-0.41

-4.86

-18.11

6.10

16.59

NPISH

-3.25

7.84

53.77

7.92

-0.38

174.87

289.76

418.54

Government

8.88

0.14

2.26

22.38

6.80

148.29

99.18

12.13

Individual

-41.59

-28.86

-33.32

-19.61

-1.81

158.30

106.49

15.75

Collective

52.31

15.70

24.09

47.85

9.65

144.99

96.78

10.93

2019

2020

Q on Q

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Households

-20.47

6.33

7.18

9.89

-24.03

-8.48

38.85

20.76

NPISH

23.68

-56.40

45.71

37.37

14.17

20.29

106.61

82.75

Government

-4.04

-5.84

2.19

32.54

-16.26

118.90

-18.02

-25.39

Individual

-36.96

-5.85

2.15

32.58

-22.99

147.68

-18.34

-25.68

Collective

15.92

-5.84

2.20

32.53

-14.03

110.40

-17.91

-25.29

 

 

 

Growth in Consumption Components, 2019, 2020  (Nominal), Percent,%)

 

2019

2020

 

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

YoY

Households

7.37

15.00

7.37

10.07

8.15

-10.84

-1.83

-0.71

NPISH

0.55

11.38

57.80

10.75

2.23

180.28

167.64

12.18

Government

13.17

3.43

4.94

25.59

9.61

153.17

104.41

15.07

Individual

13.20

3.45

4.92

25.60

5.19

163.38

111.91

18.79

Collective

13.16

3.43

4.95

25.59

11.06

149.81

101.94

13.84

2019

2020

Q on Q

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Households

-15.14

9.03

11.74

6.46

-16.61

-10.12

23.04

7.68

NPISH

24.48

-55.84

45.71

38.26

14.91

21.07

39.14

-42.05

Government

-3.42

-4.62

2.19

33.40

-15.71

120.32

-17.49

-24.90

Individual

-3.39

-4.62

2.15

33.44

-19.10

138.81

-17.81

-25.20

Collective

-3.43

-4.61

2.21

33.39

-14.60

114.55

-17.38

-24.80

 

Not-for-Profit-Institutions-Serving-Households (NPISH) Consumption

 

Final consumption expenditure by non-profit institutions serving households recorded growth rates of 289.76% in Q3 and 418.54% in Q4 2020, year on year in real terms. For annual 2020, growth in real expenditure for this component was recorded at 212.36% year on year. Quarter on quarter, growth in real NPISH expenditure stood at 106.61% in Q3 but dropped to 82.75% in Q4 2020. This expenditure component accounted for 1.30% of real GDP expenditure at market price in Q3 and a share of 2.19% in Q4 2020.  For 2020, it accounted for 1.24% of total real GDP expenditure at market prices.

 

General Government

In Q3 and Q4 2020, real general government expenditure grew by 99.18% and 12.13% respectively, compared to 2.26% and 22.38% in 2019. On an annual basis, real growth for general government expenditure in 2020 stood at 61.58% compared to 8.78% in 2019. Quarter on quarter, growth was recorded at -18.02% and -25.39% in Q3 and Q4 2020 respectively.

In nominal terms, government expenditure grew by 104.41% in Q3 and 15.07% in Q4 2020 resulting in an annual nominal growth rate of 65.52% in 2020. Government expenditure, however, grew more rapidly in 2020 than in 2019 by 53.35% points. In 2020, this component accounted for 9.40% of total real GDP expenditure at market price.

 

Gross Fixed Capital Formation (GFCF)

Real GFCF recorded growth in the third and fourth quarters of 2020 at -6.57% and -1.08% year-on-year respectively. On an annual basis, real GFCF grew by -7.55%, or by -15.84% points lower than in 2019.  Quarter on quarter, real GFCF grew by 3.25% and 22.83% in Q3 and Q4 2020 respectively. In nominal terms, Q3 and Q4 2020 recorded 21.78% and 36.42% growth rates. GFCF grew by 23.21% nominally in 2020 while accounting for 14.95% of total real GDP expenditure at market prices in 2020.

 

Changes in Inventories

Changes in inventories, often regarded as a sign of economic confidence (as firms stock up on products if they anticipate higher future demand), declined by -7.76% and -9.01% in Q3 and Q4 2020 respectively in real terms. For 2020, this component grew by 5.94% compared to a growth of -26.23% in the previous year. In nominal terms, changes in inventories grew by 0.86% year on year in 2020 but accounts for less than 1% of total real GDP expenditure at market prices.

 

Consumption of Fixed Capital

Consumption of fixed capital is a measure of depreciation of assets and represents the difference between gross domestic product (GDP) and net domestic product (NDP). Growth in consumption of fixed capital in real terms declined by -0.71% in Q3 2020 and by -0.89% in Q4 2020 compared to -44.78% recorded in Q3 2019 and -0.34% recorded in Q4 2019. Annual growth rate was -1.29% in 2020, better than -23.15% recorded the previous year.  In nominal terms, Q3 and Q4 2020 grew by 6.86% and 13.64% respectively. CFC grew by 7.05% in 2020 compared to 16.33% a year earlier.

 

Growth in Capital Accumulation in 2019, 2020 (Real), (percent, %)

 

 

 

2019

2020

YoY

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GFCF

13.71

13.34

-0.13

6.31

4.46

-25.38

-6.57

-1.08

Changes in Inv.

-9.20

-49.25

-44.84

-0.08

-4.18

59.31

-7.76

-9.01

Cons. of fixed capital

-6.69

-42.97

-44.78

-0.34

-2.44

-0.73

-0.71

-0.89

2019

2020

Q on Q

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GFCF

-0.14

11.17

-17.46

16.02

-1.88

-20.58

3.35

22.83

Changes in Inv.

6.28

-41.82

-13.70

87.24

1.92

-3.27

-50.04

84.71

Cons. Of fixed capital

-12.71

-36.93

-11.47

104.48

-14.55

-35.83

-11.45

104.10

 

 

 

Growth in Capital Accumulation in 2019, 2020 (Nominal), (percent, %)

 

 

2019

2020

Y on Y

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GFCF

70.89

54.07

30.21

38.13

37.64

-1.76

21.78

36.42

Changes in Inv.

10.74

10.13

15.05

13.02

9.87

-3.49

-6.68

4.34

Cons. of fixed capital

13.80

23.77

15.16

12.73

11.87

-3.42

6.86

13.64

2019

2020

Q on Q

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GFCF

7.70

19.42

-8.52

17.40

7.32

-14.77

13.41

31.51

Changes in Inv.

8.49

13.95

-10.58

2.24

5.47

0.10

-13.54

14.31

Cons. Of fixed capital

-10.89

23.52

-8.27

11.65

-11.57

6.64

1.50

18.73

 

Exports of Goods and Services

In the third and fourth quarters of 2020, real exports grew by -42.05% and -57.79%, year on year, resulting in an annual growth rate of -26.96%, or 41.94% points lower than 14.98% recorded in 2019. Quarter on quarter, however, growth in real exports remained negative from Q1 2020 to Q4 2020.

 

In nominal terms, exports in goods and services fell by -40.62% in Q3 and -35.96% in Q4 2020 to reach annual growth rate of -34.24% in 2020 compared with 3.53% in 2019.

 

Imports of Goods and Services

As with exports, imports of goods and services also declined in real terms, recording -22.74% in Q3 and -39.93% in Q4. On an annual basis however, the real growth of imports was worse than 2019, at -23.30% in 2020 compared to 27.26% in the previous year. On a quarter on quarter basis, imports grew by 16.29% in Q3 but declined -3.48% in Q4 2020.

Nominal imports of goods and services fell during the three quarters (Q2, Q3 & Q4 2020), recording -22.23% in Q2, -4.54% in Q3, and -25.54% in Q4 2020, year on year, to give an annual growth rate of -11.38%. This was -38.97% points lower than annual growth rate of 2019. Quarter on quarter, nominal imports rose in Q3 by 22.16%, but declined in Q4 2020 to -3.15 %.

 

Net Balance of Trade

Due to declining rates of growth in exports and imports in 2020, the growth in net balance of trade (or net exports) was negative in Q3 and Q4 2020. On a year on year basis, the net trade balance recorded -52.39% growth rate in real terms in Q3 and -72.61% growth rate in Q4. This resulted in an annual growth rate of -29.55% in real terms. On a quarter on quarter basis, the net trade balance grew by -30.43% and -53.90% in Q3 and Q4 2020 respectively. This component accounted for 13.25% of total real GDP expenditure at market prices in 2020.

 

Growth in Trade and Services in 2019, 2020 (Real), (percent, %)

 

 

 

2019

2020

 

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Y on Y

Exports

16.84

19.61

11.01

14.10

15.49

-13.40

-42.05

-57.79

Imports

34.13

57.71

0.02

30.37

9.08

-33.88

-22.74

-39.93

Trade Balance

7.08

0.00

17.94

3.40

20.02

3.22

-52.39

-72.61

2019

2020

Q on Q

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Exports

-4.52

-2.10

27.85

-4.52

-3.36

-26.59

-14.45

-30.46

Imports

-0.32

5.85

-0.47

24.14

-16.59

-35.84

16.29

-3.48

Trade Balance

-7.28

-7.73

50.84

-19.87

7.62

-20.65

-30.43

-53.90

 

Growth in Trade and Services in 2019, 2020 (Nominal), (percent, %)

 

 

 

2019

2020

 

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Y on Y

Exports

-0.76

3.42

6.44

4.84

-9.22

-49.78

-40.62

-35.96

Imports

34.59

58.32

0.31

30.48

11.45

-22.23

-4.54

-25.54

Trade Balance

-1640.97

-481.96

-20.92

105.67

74.53

51.16

163.81

-9.97

2019

2020

Q on Q

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Exports

0.75

2.21

12.72

-9.68

-12.76

-43.45

33.26

-2.59

Imports

-0.26

5.88

-0.48

24.15

-14.81

-26.12

22.16

-3.15

Trade Balance

-3.23

17.08

-35.64

182.03

-17.88

1.40

12.33

-3.75



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