Pressure on naira will persist, NBS tells Nigerians

The National Bureau of Statistics (NBS) has stated that speculative pressure on the Naira was likely to persist in 2016 in light of the current state of foreign reserves.
The agency also predicted that inflation, which is currently at 9.6 percent, may further rise to 10.16 percent by year end and then ease to 9.01 percent over the period of 2017 to 2019.

The NBS made the observations in its latest report on “The Nigerian Economy: Past, Present and Future” posted on its website.
It said GDP growth is expected to increase to 3.78 percent this year from 2.97 percent in 2015 and 5.61 percent by 2019.

It predicted that total trade will increase on the margin by 2.41 percent, as imports and exports increase by 2.88 percent and 2.16 percent respectively.
The NBS report stated that beyond 2016 however, growth was expected to jumpstart, averaging 5.41 percent yearly between 2017 and 2019 as infrastructure developments take shape and provide support for both the oil and non-oil sectors.

Read also: Buhari blames IBB for Naira fall

“While upward pressure on inflation is expected, meaning that the Headline index may rise from 9.55% to 10.16% in 2016, rates are expected to moderate beyond this period and average 9.01% between 2017 and 2019. The value of total trade is expected to slow in 2016, increasing by 2.41% as a result of moderations in imports and exports. Beyond 2016, both import and exports are expected to increase and total merchandise trade is expected to Average 15.61% growth during the period,” the report stated.

“We expect that the Central Bank’s adjustment of the foreign exchange management framework will be steady in the year and will thus mean a gradual easing in prices beyond 2016. Over the 2017 to 2019 period, Headline inflation is expected to average 9.01%.”

Noting that the 2017 to 2019 period is expected to reap the benefits of the extra N1.6 trillion into capital expenditures in the 2016 budget, it said, “In particular, plans by the government authorities to increase power supply by developing critical infrastructure to transport gas to the power plants in order to add 2,000 MW to the country’s stock of power within the next 12 to 15 months will have multiple effects on both the manufacturing and services sectors”.

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