Economic and Financial Markets Outlook 2018 – 2022 - Strong Growth Prospect with Downside Risks


Monday, February 12, 2018 /1:20 PM / FSDH 

FSDH Research forecasts a Real Gross Domestic Product (GDP) growth rate of 3.16% in 2018 and 4.09% in 2019

Agriculture, Trade, and Mining & Quarrying sectors, with forecast growth rates of 4%, 2% and 3.2% respectively, would lead to the growth in 2018

Other leading sectors of the economy that would contribute to the growth are: Information and Communication (I&C): 2.2%; Real Estate: 2.5%; Construction: 4% and Manufacturing: 1%

The major downside risks to the growth are: the rising social unrest in some parts of the country may affect economic activities and lead to escalating inflation rate; external factors that can lead to a significant drop in the crude oil price and possible capital flight out of Nigeria if there are excessive interest rate increases in the advanced economies

Although we do not expect any political instability in the country, electioneering activities may slowdown economic activities and exert upward pressure on prices

The outlook of the equity market remains positive in 2018 as FSDH Research expects the macroeconomic environment in Nigeria to strengthen further. Thus we forecast a growth of 27.43% in 2017, lower than the growth of 42.30% recorded in 2017

We expect a strong rally in the equity market in the first half of the year 2018.  We see investment opportunities in the Banking, Building Materials and Consumer Goods sectors of the market

FSDH Research expects the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to ease monetary policy as inflation rate declines and exchange rate remains stable. This development will lead to growth in credits to the private sector, rebound in the activities in the corporate bond market, increase in the issuance of commercial paper and a growth in the equity market.

We expect the average yields on the fixed income securities to drop substantially lower in 2018 than the levels attained in 2017.

Click here for the full report.

Proshare Nigeria Pvt. Ltd.

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