Wednesday, January 31, 2018 11:36 AM / FSDH
· FSDH Research forecasts a Real Gross Domestic Product (GDP) growth rate of 3.16% in 2018
· The 2018 GDP growth rate would be the highest since 2015
· The expected growth in the economy, though still fragile, has relatively reduced the inherent risks in the business environment
· This will stimulate economic activities in Agriculture, Trade, Mining and Quarrying, Information and Communication Technology, Education, Real Estate, Construction and Manufacturing sectors
· The need for monetary policy easing will continue to grow as the risks affecting price stability in the economy decrease. This will make cheaper funds available for bankable projects
· The drop in the yields on the Federal Government of Nigeria’s securities will pave the way for more issuance of Corporate Bonds and Commercial Papers to fund long-term expansion and short-term working capital requirements
· This will also lead to lower financing cost for corporates and profitability will increase
· FSDH Research notes that there are downside risks to the forecast growth
· 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 may have adverse impact on the economic activities in Nigeria
· There could be capital flight out of Nigeria if there are excessive hikes in the interest rates in the advanced economies.
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