News Analysis: FSDH Economic Outlook 2024 Unveils Economic LandscapeThank you for reading this post, don't forget to subscribe!
In a riveting exploration of Nigeria’s economic future, FSDH Research presents a comprehensive analysis of the Economic Outlook for 2024, revealing a dynamic landscape of growth, challenges, and strategic maneuvers.
GDP Growth: A Resilient Ascent
The unfolding narrative begins with GDP growth projected to soar at an average of 2.9% in 2024, showcasing a noteworthy improvement from the previous year’s 2.5%. This surge is propelled by a compelling mix of enhanced oil production, increased government spending, and the populace adapting to the removal of fuel subsidies. Sectors such as finance and information communication emerge as protagonists, driving the storyline, while manufacturing and agriculture navigate through a subplot of modest growth within a harsh operating environment.
FSDH Estimate: 2.5%
Inflation: The Stealthy Challenger
The plot thickens as inflation takes center stage, with expectations set at an average of 27.9% in 2024, a surge from the previous year’s 24.5%. Insecurity, logistics bottlenecks, and infrastructure deficits emerge as formidable adversaries, casting shadows over businesses. However, a glimmer of hope arises as the narrative unfolds, predicting a downward trajectory in the latter part of the year, with fiscal authorities gearing up to confront these challenges.
FSDH Estimate: 24.5%
Monetary Policy: Navigating Uncertain Waters
The Central Bank of Nigeria assumes a pivotal role in the economic drama, steering towards an inflation target agenda for 2024. A hawkish environment unfolds as liquidity faces tightening through the fixed-income market. The unfolding storyline introduces an MPR of 19% in H1 2024, with gradual adjustments downwards in the latter half as the inflation rate subsides.
FSDH Estimate: 18.75%
Exchange Rate: A Currency Odyssey
Amidst rising demand for imported goods and services, the FX market embarks on an odyssey, grappling with the discrepancy between overall GDP growth and domestic needs. The storyline reaches its climax with an anticipated average exchange rate of N925 per US$ in the official market for 2024.
Capital Markets: Bulls and Bears in a Tug of War
The Equity Market takes center stage with Nigerian equities appearing undervalued, setting the stage for a tug of war between bulls and bears. Caution signals flash as investors brace for impact following earnings results, yet hopes rise with potential FX market improvements and global policy normalization. The NGX-ASI emerges as the protagonist, navigating through projections to close the year between 60,000 and 66,000 points.
FSDH Estimate: -13.0%
1-year NTB Rate: Balancing the Scales
Tighter monetary policy takes center stage in H1 2024, a quest for balance in the face of inflation. The Federal Government enters the scene, aiming to raise funds via the domestic debt market. The unfolding narrative introduces a gripping quest for balance, foreseeing an anticipated rise in NT-bill rates on average in 2024.
FSDH Estimate: 13.0%
Bond Market: The Treasury’s Dilemma
The Bond Market drama unfolds as the Federal Government relies on the domestic debt market to fund the budget deficit. Global interest rates cast a shadow, making the Eurobond market a distant dream. Bond yields rise in this intense showdown between supply and demand.
– 5Y Bond Yield (Average): 16.0%
– 10Y Bond Yield (Average): 17.0%
– 30Y Bond Yield (Average): 18.0%
In conclusion, the FSDH Economic Outlook 2024 offers a compelling narrative, weaving together economic growth, challenges, and market dynamics into a news analysis that sheds light on the unfolding economic story in Nigeria.