In the first and second quarters of 2018, real GDP grew by 2.04% and 1.46% respectively, building on the growth recorded in 2017 which stood at 0.81%. When compared with the corresponding quarters of 2017, real GDP growth rate increased by 3.09% points and 0.68% points in Q1 and Q2 2018 respectively.
Real Household Consumption Expenditure, in the first quarter of 2018, declined by 0.25% but grew 0.78% year on year in Q2 2018. Government Consumption Expenditures, which had generally recorded negative year on year growth rates in 2017, grew by 13.83% in the first quarter, and 33.71% in second quarter of 2018.
Similarly, Net Exports grew in real terms in the first quarter of 2018 at 7.23% but declined 8.30% in Q2 2018 year on year. The growth recorded in the first quarter of 2018 was an improvement when compared to the corresponding quarter of the previous year (-19.46%). However, the reverse was the case in Q2, as the growth rate in the second quarter of 2018 slowed by 8.30% compared to Q2 2017 (18.26%).
National Disposable Income rose by 0.26% in the first quarter of 2018 in real terms, but slowed by –1.98% in the second quarter of 2018 year on year.
Compensation of Employees maintained its historical trend in the first and second quarters of 2018, growing at 14.71% and 15.33% respectively.
However, Operating surplus continued to record negative growth rate, declining by 2.47% and 3.44% in Q1 and Q2 2018 respectively.
GDP By Expenditure
The Gross Domestic Product (GDP) can be derived as the value of all goods and services available for final uses and export. GDP at market prices includes net taxes on products; taxes are subtracted to obtain basic price GDP.
The expenditure approach measures the final uses of the produced output as the sum of Final consumption, Gross Capital Formation and Exports less Imports, which are considered in turn in this report. Consumption of fixed capital—a measure of depreciation of assets—comprises the difference between Gross Domestic Product (GDP) and Net Domestic Product (NDP) and is also considered in this report.
Basic price GDP grew in real terms by 0.82% year-on-year in 2017. This was a significant improvement compared to a decline of -1.58% decline in real GDP growth rate in 2016.
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Household Final Consumption
Household final consumption in real terms in Q1 2018 quarter grew by –0.25% compared to the corresponding quarter in 2017 where it grew by 5.41%. This implies a decline of 5.66% points. In the second quarter, consumption grew by 0.78% compared to 0.97% in the previous year, implying that consumption growth slowed by 0.20% points from Q2 2017. On a quarter on quarter basis, the second quarter of 2018 was an improvement over the first, as growth was recorded at 4.55% compared to –11.44%.
In nominal terms, household final consumption grew by 7.65% in the first quarter of 2018. This growth was lower than the 11.11% recorded in Q1 of 2017. In the second quarter of 2018, growth was slower than recorded in the corresponding quarter of 2017 by 13.02% points. Compared to 2017, the relatively subdued growth in household consumption reflects prevailing pressure on households’ purchasing power during the period.
Household final consumption component accounted for 60.1% and 61.1% of real GDP in 2018 Q1 and Q2 respectively.