Monday, July 12, 2021 / 02:33
PM / by Meristem Research / Header Image Credit: Meristem
Unlike in H1:2020, when global policymaking was focused mainly on discovering the path out of the COVID-19 health crisis, H1:2021 presented a new challenge of navigating the path to recovery. This followed the development and deployment of vaccines and gradual return to normalcy which began in H2:2020. Although significant progress has been achieved with respect to the pace of vaccinations, a lot still needs to be done to achieve global herd immunity.
On the global front, price levels across the global economy have trended upwards in H1:2021, buoyed by sustained fiscal and monetary supports, fragile commodity supply chains and rising crude oil prices.
Economic growth has maintained a slow but steady path in the domestic space, influenced by several counterbalancing factors. On the one hand, the accommodative monetary policy stance of the Monetary Policy Committee, in addition to various (credit) intervention programmes by the CBN, has been supportive of growth. On the other hand, oil output cap, FX illiquidity, heightened insecurity and inefficient supply chains have continued to constrain GDP growth.
In forming our outlook for Nigerian markets and asset classes, we considered the not-so-optimistic economic prospects, fiscal and monetary policy direction, sector-specific risks, inflationary pressures, and weak foreign capital inflows.
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