By Nse Anthony-Uko,
ABUJA, (Sundiata Post) – Nigeria’s gross domestic product contracted by 1.5 per cent in 2016, the National Bureau of Statistics said on Tuesday.
Fourth quarter output shrank by 1.3 per cent, the NBS said, indicating slower rate of contraction compared to -2.24 per cent contraction in the preceding quarter.
Commenting on this performance, analysts at FSDH Merchant Bank Limited, forecasts that the Nigerian economy will recover in 2017, given the current developments in the global oil market and the improvement in the crude oil production in Nigeria.
The economy slid into recession for the first time in 25 years in the second quarter of 2016 as a slump in crude prices hammered the OPEC member’s public finances. Crude sales make up two-thirds of government revenue.
According to the NBS, GDP contracted by-1.30 per cent year-on-year in real terms,from N18.53 trillion in Q4 2015 to N18. 29 trillion in Q4 2016. This decline was less severe than the decline recorded in the previous quarter, of -2.24 per cent, but lower than the growth rate recorded in the final quarter of 2015, of 2.11 per cent. Quarter on quarter, real GDP increased by 4.09 per cent, which partly reflects seasonal factors as well as a rise in the general price level.
For the full year 2016, therefore GDP contracted by -1.51 per cent, indicating real GDP of N67.9 trillion for the year.
This contraction reflects a difficult year for Nigeria, which included weaker inflation- induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency, and problems in the energy sector such as fuel shortages and lower electricity generation.
Nominal GDP was N29.2 trillion at basic prices in the fourth quarter of 2016, which represents year on year nominal growth of 12.97 per cent. In contrast toreal growth, this is 5.84 points higher than the rate recorded in the same quarter of 2015,implying that the GDP deflator increased faster than the earlier period.