Wednesday, 22 November, 2017

Recession exit: Nothing to celebrate until harsh living conditions improve - PDP

Buhari says he's happy Nigeria has exited recession but Mixed reactions trail “out of recession” verdict by NBS
Sammy Stanley | 07 September, 2017, 01:25

Macroeconomics statistics website Trading Economics says GDP Growth Rate in South Africa averaged 2.84% from 1993 until 2017, reaching an all time high of 7.60% in the fourth quarter of 1994 and a record low of -6.10% in the first quarter of 2009.

It said quarter on quarter, real GDP growth was 3.23 per cent.

This is 2.04 per cent higher than the rate recorded in the corresponding quarter of 2016 and higher by 1.46 per cent points from rate recorded in the preceding quarter.

Indeed, Nigeria owes the improvement to a boost in its oil and agricultural productions as well as a burst in its foreign exchange reserves, which should sustain its economic growth.

A recession occurs when the GDP diminishes for two consecutive quarters, the rate of unemployment rises and housing prices decline.

Mohammed said the country has been on the path towards recession since mid-2014 due to a combination of factors, including the total dependence on a mono product - oil - and the failure to save during the boom years, the country officially slipped into recession in the 2nd Quarter of 2016. It contributed 0.7 of a percentage point to overall GDP growth.

This is still lagging Nigeria's population growth of 2.3%.

Noting that SA's growth for the year as a whole was forecast at just 0.5%, after 0.3% in 2016, Investec economist Kamilla Kaplan said: "SA's performance diverges from the synchronised global economic upswing".

"I don't believe that recovery from recession means that prices will come down, why prices are high is because of a fall in the value of naira to the dollar and as long as it persists, prices won't come down".

"The end of the recession is welcome but economic growth remains fragile and vulnerable", said Adeyemi Dipeolu, the presidential economic advisor, in a presidency statement.

On his part, Ola Azeez, the managing director of Remolaz Management Consult, said it was good that the economic statistics were giving Nigerians a ray of hope but their livelihood had not changed.

Africa's largest economy shrank by 1.5 percent in 2016 for its first annual contraction in 25 years.

In response to a question that the exit from recession was a political gimmick, the NBS boss said GDP report which showed that Nigeria exited recession in the second quarter was not politically motivated.

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