FBNQuest Projects 2% GDP Growth for Nigeria in 2021

Date:

The research team at FBNQuest has projected that Nigeria’s economy would expand by two per cent on the back of a modest fiscal stimulus and targeted private investment.

Thank you for reading this post, don't forget to subscribe!

The team predicted that the Nigerian Stock Exchange’s (NSE) All-Share Index would rise by 20 per cent while in the fixed income market, yields would rise by three percentage points to between 10 and 11 per cent by the end of the year.

The FBNQuest Research team made the projections in its 2021 outlook report released recently.

With the theme: “Tentative emergence from the shadow of COVID-19,” the outlook report captured the firm’s view on the Nigerian economy, socio-political environment and traditional asset classes (fixed income and equities) against the backdrop of the economic contraction that followed the COVID-19 pandemic which started last year.

The report noted that the second term of Nigeria’s President, Muhammadu Buhari, has been “hijacked” by COVID-19, with a sharp decline in oil prices and unprecedented lockdowns spurring a recession in 2020.

According to the report, Nigeria’s government, unlike its counterparts in many advanced economies, has limited ammunition to catalyse a robust recovery in 2021.

The report also highlights that the combined monetary and fiscal stimulus amounts to just 4.0 per cent of gross domestic product (GDP), compared to over 10 per cent of GDP in large economies such as Brazil, Turkey, the United States, Canada, and Japan.

As Nigeria comes to grips with the challenges brought about by COVID-19, the report cited the speedy passage of the federal budget for the second year in a row and the end of fuel subsidy payments as positive reforms.

However, it said the insecurity in many parts of the country and the slow pace of oil sector legislative reforms are negatives for an economy desperate for strong and inclusive growth.

Nevertheless, FBNQuest expects low interest rates in the United States and an average Bonny Light Crude price of $56 per barrel to support Nigeria’s economic recovery in 2021.

With regards to asset prices, FBNQuest projected another positive year for equities in 2021.

The team explained that lower yields and the elevated liquidity available to domestic institutions which buoyed stocks in 2020, would continue into 2021, albeit with less dramatic impact, as domestic institutions are swayed by dividend yield offered by bank stocks.

Naija247news
Naija247newshttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

Share post:

Subscribe

Popular

More like this
Related

Police Arrest 16-year-old boy for defiling schoolmate in Port Harcourt

March 19, 2024. Azonuchechi Chukwu. The Rivers State Police Command has...

Akwa-Ibom lovers fake own kidnap, demand N4m ransom

March 19, 2024. Azonuchechi Chukwu. The Akwa Ibom State Police Command...

The House Of Rep Member Is In Opposition Party – Soludo States Why He Didn’t Construct Road

19 Mar,2024. The Anambra State Governor, Chukwuma Soludo, has said...

Peter Obi Spotted At Central Mosque To Break Fast For Ramadan

19,Mar,2024. Last night, Peter Obi joined almost 1000 people at...

Discover more from Naija247news

Subscribe now to keep reading and get access to the full archive.

Continue reading