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Firms in positive sentiment on the economy — CBN survey

By Elizabeth Adegbesan

A survey by the Central Bank of Nigeria, CBN, has indicated private sector positive sentiment over the country’s macro-economic conditions.

Emefiele CBN Governor

Consequently, the firms have projected a decline in inflation rate this month even as they expect further growth in confidence in macro-economy during the period.

The CBN, yesterday, disclosed this in its Business Expectation Survey (BES) report for March 2019.

According to the survey report, businesses’ overall confidence in the macro economy grew by 6.1 points to 28.2 index points in March from 22.1 index points in February.

The report also showed that firms expected  confidence in the macro-economy to grow by 6.3 points to 64.8 index points in April from the projected growth of 58.5 index points in March.

The report stated: “The respondents’ average expected inflation rate in the next six months and twelve months stood at 11.2 and 11.1 percent, respectively.

“Respondent firms expect borrowing rates to rise in current, next and the next twelve months as the confidence indices stood at 15.5, 0.4 and 1.8 points, respectively.”

On firms’ overall confidence index, the report read: “At 28.2 index points, respondents expressed optimism on the overall confidence index (CI) on the macro economy in the month of March 2019. The businesses outlook for April 2019 showed greater confidence on the macro economy with 64.8 index points.

“The optimism on the macro economy in the current month was driven by the opinion of respondents from services (16.8 points), industrial (8.6 points), wholesale/retail trade (2.3 points) and construction sectors (0.5 points). Whereas the major drivers of the optimism for next month were services (37.0 points), industrial (19.4 points), wholesale/retail trade (6.2 points) and construction sectors (2.2 points)

“The positive outlook by type of business in March 2019 were driven by businesses that are neither import-nor export-oriented (20.3 points), both import-and export-oriented (4.1 points), import-oriented (3.5 points), and those that are export-related (0.2 points)

“All the four sectors expressed optimism on own operations in the review month. However, respondents from the services sector expressed the greatest optimism on own operation with an index of 7.1 points, followed by the industrial sector with 3.3 points, the wholesale and retail trade with 2.0 points and the construction sector with 0.5 points respectively

“The surveyed firms identified insufficient power supply (63.9 points), high interest rate (55.3 points), unfavourable economic climate (54.6 points), financial problems (51.8 points), unfavourable political climate (50.0 points), unclear economic laws (49.4 points), insufficient demand (42.8 points) and access to credit (41.8 points) as the major factors constraining business activity in the current month.”

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