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Nigeria’s GDP drops in first quarter, following shrink in oil sector – NBS

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NIGERIA’s economy grew by 2.01 per cent in the first quarter of 2019 as the nation’s oil sector which is the economic mainstay shrank, according to records obtained from the website of National Bureau of Statistics, NBS, published on Monday.

The growth rate also called the Gross Domestic Product, GDP, is the benchmark for the size of the economy which is expressed quarterly to show a periodic measure of how the economy is faring.

Within the period, the non – oil sector grew by 2.47 per cent while the oil sector contracted by 2.40 per cent indicating a drop from the last quarter of 2018 pegged at 2.38 per cent which was likely to have been boosted by state spending in the run-up to February and March elections the report states.

“It is worth noting that general elections were held across the country during the first quarter of 2019 and this may have reflected in the strongest first-quarter performance observed since 2015.

“Aggregate GDP stood at N31.79tn in nominal terms. This aggregate was higher than in the first quarter of 2018 which recorded N28.44tn, representing a year-on-year nominal growth rate of 11.80 per cent. The aggregate was, however, lower than in the preceding quarter of N35.23tn, by -9.75 per cent,” the report reads.

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The report for the first quarter of 2019, showed that the GDP grew by 2.01 per cent in real terms in the first quarter, compared to 2.38 per cent in the fourth quarter of 2018. While the growth rate in the first quarter of 2018 was 1.89 per cent appreciating by 0.12 per cent.

Real GDP is the economic output of a country adjusted for the effects of inflation.

The Central Bank of Nigeria, CBN, earlier in the year had predicted a forecast growth of 3 per cent for 2019 partly due to projections driven by higher crude oil prices.

Analysis in a Bloomberg report shows that a decline in growth could increase pressure on the Central Bank to cut interest rates further when it announces its policy decision which might increase lending rates.

The report also revealed that the non-oil sector contributed 90.86 per cent to the nation’s GDP in the first quarter of 2019, which is slightly higher than 90.45 per cent recorded in the first quarter of 2018 but lower than the fourth quarter of 2018 which was put at 92.94 per cent.

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