The Central Bank of Nigeria (CBN) will have more worries to address when its Monetary Policy Committee (MPC) meets next week, with economic growth not only contracting, but inflation rate – a measure of the average change in the prices of goods and services rising further.
Also, the country’s unemployment rate jumped to 14.7million from 12.9million recorded last year, the National Bureau of Statistics said yesterday.
The country’s economic growth slowed slightly in the third quarter of this year to 7.4 per cent year-on-year (YoY) as oil output dipped. It is expected that the rise in headline inflation in October to 10.5 per cent will strengthened an interest rate rise next week.
Gross domestic product (GDP) slowed from 7.72 per cent in the second quarter. Real GDP growth slowed to 7.40 per cent YoY in third quarter of 2011, from 7.72 per cent in second quarter 2011, largely due to the contraction of the oil and gas sector, due to lower oil production, said Renaissance Capital.
The research outfit however said the strong overall growth suggests that the non-oil sector had stellar performance during this period. The most recent oil production statistic available is for July at 2.34 million barrel per day (mbd), which was lower than the average for first half of 2011 at 2.43mbd, indicating a slowdown.
“Given the high base effect from second half of 2010, when production averaged 2.48mbd, a contraction in oil and gas GDP for 2H11 is likely”, said Renaissance Capital.
“While the non-oil sector grew with major contributions to growth coming from agriculture, wholesale/retail trade, telecommunications, manufacturing and finance/insurance sectors, the oil sector output however recorded a negative growth during the third quarter of 2011 arising from a decrease oil production,” a National Bureau for Statistics (NBS) document said. Consumer inflation rose to 10.5 per cent year-on-year in October, up from 10.3 per cent the previous month, the National Bureau of Statistics (NBS) said.
Food prices, the largest contributor to the consumer index, rose 9.7 per cent year-on-year in October from 9.5 per cent the previous month.