By Elizabeth Adegbesan
Firms operating have projected a rise in inflation rate and borrowing rates this month even as they expect further growth in confidence in macro economy during the period.
According to the Central Bank of Nigeria’s, CBN, ‘Business Expectation Survey’ report for November 2018, released yesterday, respondent firms expect inflation rate to rise in both the November and December, 2018, with confidence indices of 7.0 and 3.4 points for the two months respectively. Similarly, respondent firms expect borrowing rates to rise in both current month and next month as the confidence indices stood at 5.8 and 2.2 points, respectively.”
The report stated: “At 25.9 index points, respondents’ overall confidence index (CI) on the macro economy in November 2018 was more optimistic when compared to its level of 23.2 index points recorded in October 2018. The businesses’ outlook for December 2018 showed greater confidence on the macro economy at 65.6 index points.
“The optimism on the macro economy in the current month was driven by the opinion of respondents from services (14.9 points), industrial (7.8 points), wholesale/retail trade (2.6 points) and construction (0.5 points) sectors, whereas the drivers of the optimism for next month were services (37.0 points), industrial (19.2 points), wholesale/retail trade (6.6 points) and construction (2.8 points) sectors.
“The positive outlook by type of business in November 2018 was driven by businesses that are neither import-nor export-oriented (18.9 points), import-oriented (4.5 points), both import-and export-oriented (1.8 points) and those that are export-related (0.7 points)”.
The surveyed firms identified insufficient power supply (64.7 points), high interest rate (57.9 points), unfavourable economic climate (55.1 points), financial problems (51.2 points), unclear economic laws (51.0 points), unfavourable political climate (48.6 points), access to credit (41.3 points) and insufficient demand (41.2 points) as the major factors constraining business activity in the current month.