The Federal Government (FG) is expected to be cautious in its expectation of a robust growth in the fourth and last quarter of 2023, after a mild growth recorded in the third quarter.
The National Bureau of Statistics (NBS) said,the country’s Gross Domestic Product (GDP) only crept from the 2.5 per cent it stood in the second quarter of 2023 to 2.54 per cent in the fourth quarter.
Bismarck Rewane, Chief Executive Officer (CEO) of Financial Derivatives Company (FDC) Limited said, “looking ahead, there is cautious optimism for a mildly stronger growth in the fourth quarter compared to the third quarter.
“The International Monetary Fund (IMF) anticipates a full-year growth rate of 2.9 per cent in 2023. The policy-making environment is expected to become clearer and more predictable, especially in exchange rate management, and the curtailment of subsidies on petrol and electricity in the near term.
“However, the tangible benefits of market reform policies are unlikely to manifest until the second quarter of 2024”.
Rewane, in the current FDC publication said, the tepid increase in growth was primarily driven by the services sector, especially telecommunications, and financial services including insurance. Among the 46 business activities monitored by the NBS, 22 of them expanded, while 12 slowed, and 12 others contracted.
Specifically, analysts from Afrinvest said, from a structural perspective, Services remained the main engine of growth (4.0 per vent year-on-year (y/y)) ahead of the Agriculture and Industries sectors which grew 1.3 per cent and 0.5 per cent respectively in the period.
Further analysis across activity sectors showed Finance & Insurance (4.4 per cent of real GDP) rose 28.2 per cent y/y, reflecting the impact of the foreign exchange (forex) revaluation gains on the books of major players in the sector.