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Nigeria’s economy likely to grow by 1.5% in 2021 – JP Morgan

Kayode Tokede with News Agency

JP Morgan disclosed that Nigeria’s economy is expected to grow grow by 1.5per cent this year.

This was disclosed by JPMorgan Chase Bank NA analysts including Gbolahan Taiwo and Ayomide Mejabi in an email reported by Bloomberg on Wednesday afternoon.

The report stated JP Morgan said Nigeria’s economy is likely to expand by 1.5 per cent in 2021.

They added that the “continued lack of foreign-exchange liquidity, underlying economic weakness, an emerging third wave of Covid-19 infections and a slow rollout of vaccines will likely slow the recovery process.”

The International Monetary Fund lifted its global growth outlook to six per cent in 2021 (0.5 per cent point upgrade) and 4.4 per cent in 2022 (0.2 percentage point upgrade), after an estimated historic contraction of -3.3 per cent in 2020 due to the effects of the COVID-19 pandemic, citing that Nigeria is expected to grow by 2.5 per cent in 2021 and 2.3 per cent by 2022, while South Africa is projected to hit growths of 3.1 per cent and two per cent for the respective years in focus.

In July, the Federal Government forecasted that the Nigerian economy will grow by as much as 4.2 per cent  in 2022.

This was disclosed byMinister of Finance, Budget and National Planning, Mrs. Zainab Ahmed  at the Public Consultation on the Draft 2022 to 2024 Medium Term Fiscal Framework and Fiscal Strategy Paper.

“Inflation rate, which was planned for 11.95per cent in 2021, has been reflected in reality because the exchange rate is high. The average we have so far is 15 per cent.

We are expecting 2022 to go down slightly to 13 per cent, then 11per cent in 2023, and 10 per cent in 2024. The exchange rate of the Naira to the dollar, which was N379 in the 2021 budget, has been adjusted to the NAFEX rate of N410.15 to one US dollar.

“We are assuming, for now, the same rate for 2022, 2023, and 2024,” she said.

Meanwhile, Nigeria’s Gross Domestic Product (GDP) grew by 5.01 per cent (year-on-year) in real terms in the second quarter of 2021, marking three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.

Year to date, real GDP grew 2.70 per cent in 2021 compared to -2.18per cent for the first half of 2020. Nevertheless, quarter on quarter, real GDP grew at -0.79 per cent in Q2 2021 compared to Q1 2021, reflecting slightly slower economic activity than the preceding quarter due largely to seasonality.

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