NSE projects USD415.08 billion GDP for Nigeria in 2016

Conoil

The Nigerian Stock Exchange, NSE said in its 2016 review that global economy remained sluggish in 2016 with a forecast of 3.1% in global GDP growth according to the International Monetary Fund (IMF), compared to 3.4% originally projected, and 3.2% achieved in 2015.

Uncertainty took center stage during the year, as global economies grappled with unpredictable geopolitical developments, ranging from Brexit referendum in June to the result of US presidential elections in November.

The vast disparity between forecasted outcomes and actual results left several emerging and frontier economies, and their respective capital markets, in peril as the movement of international capital stalled in anticipation of global policy direction.

This was also compounded by the continued decline in global commodity prices, with crude dropping below the USD30/barrel mark (the lowest level in 12 years), intrinsically creating hardships for commodity dependent countries like Venezuela, Russia and Nigeria (with their impact on foreign reserves being primarily negative).

Recapping on the year 2016, the global landscape was primarily shaped by some of the following factors: The anticipated impact the UK’s “Yes” vote would have on Europe’s 2nd largest economy;  China’s shift towards growing its middle class via organic economic growth, restructuring the economy away from resource import dependency, towards a resource investment strategy; Election of US President-Elect Donald Trump and uncertainty around national policy direction (i.e. global trade implications of nationalism, immigration reforms, etc.); Continued geopolitical tension in the Middle East (i.e. continued Syrian turmoil, ISIS insurgence) and other hot spots; and Reemergence of the US Federal Reserve rate hike as a policy tool to curb economic overheating.

According to the IMF, growth in Emerging Market and Developing Economies is projected to edge up to 4.2% in 2016, 0.2 percentage points higher than the previous year. This projection, however, represents mixed expectations for economies within the region.

Robust growth in EMD Asian economies like India and strong recovery in the MENAP and CIS regions were offset by economic stagnation in areas like Latin America, the EMD EU, China and SSA. In SSA, growth in 2016 is expected to fall to 1.4% from 3.4% in 2015, primarily due to weak growth in its three largest economies, being Nigeria, South Africa and Angola, as they struggle to adjust to the “new oil order”, while attempting to rectify structural deficiencies in their respective economies.

In the case of Nigeria, despite a challenging economic environment in 2016, the country remains the economic powerhouse of Africa with an expected GDP of USD415.08 billion

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