Businesses hopeful economy will improve in August –CBN survey | Ripples Nigeria
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Businesses hopeful economy will improve in August –CBN survey

Manufacturing sector contracts in May, first time in three years –CBN

Businesses in Nigeria are nursing the hope that the economic conditions in Nigeria in the month ahead will better those of July even though this optimism is largely measured across firms, data from the July 2020 Business Expectations Survey Report of the Central Bank of Nigeria (CBN), revealsed on Friday.

Respondent firms in the opinion poll, whose thoughts are aggregated in the document posted on the CBN website, believe that things will be fairly more favourable in August with their confidence level put at 33.7 relative to a dim view of the economy held by them for the month of July, standing at -7.9.

Inflation rate is seen reaching 13.92 per cent by December from 12.56 in June amidst firms’ disapproval of government’s management approach to cost of living.

Read also: Nigerians worried galloping inflation would worsen economy coming months —CBN

Last month, food inflation in Africa’s biggest economy scaled its 26-month high and also rose for the tenth month in a row after government shut its border to food imports and the coronavirus stifled growth and crippled trade, weakening expectations of improved living in the short term.

“Furthermore, they expressed optimism in the overall business outlook in September, 2020 and January 2021 as shown in a greater confidence of the economy, at 45.5 and 62.4 index points, respectively,” the CBN says of the survey respondents.

Businesses envisage inflation rate in the next six months and in the next one year to average 13.92 and 13.95 per cent in that order.

“Respondent firms identified insufficient power supply (68.5 points), competition 62.5 unfavourable economic climate (62.0 points), financial problems (60.7 points), high interest rate (60.5 points), unclear economic laws (57.9 points), unfavourable political climate (52.8 points), insufficient demand (52.4points), access to credit (50.7 points) and lack of equipment (38.2 points) as major factors constraining business activity in the current month,” it says.

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