Emma Ujah, Abuja Bureau Chief and Elizebeth Adegbesan

ECONOMY

The Central Bank of Nigeria (CBN) has reported a negative consumer expectations in its fourth quarter 2020 Consumer Expectations Survey (CES). The survey report stated: “Consumers’ overall outlook was negative in the current quarter, as consumers were pessimistic in their outlook. However, consumers have a positive outlook for the next quarter and the next 12 months.

“Majority of consumers believe that the next 12 months would not be an ideal time to purchase big-ticket items like motor vehicles and house & lot.

“Most respondents expected the naira to appreciate, inflation rate to rise and borrowing rate to rise in the next 12 months.”

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The consumers’ overall confidence outlook was pessimistic in Q4 2020 standing at -14.8 index points.

According to the apex bank, respondents attributed this unfavourable outlook to declining economic conditions, family financial situation and declining family income

The report indicated that the major drivers of the expected upward movement in prices were increased savings, food & other household needs, Education, Purchase of Appliances/ durables, Purchase of Car/Motor Vehicle, and purchase of houses.

The consumers were, however, said to be optimistic in their outlook for the next quarter and next 12 months with indices of 10.5 and 28.9 points, respectively.

“This positive outlook could be attributed to the expected increase in net household income, an anticipated improvement in Nigeria’s economic conditions and expectations to save a bit and/or have plenty over savings in the next quarter and the next 12 months,” the report stated.

On the outlook on price changes in the next 12 months, the survey indicated that most respondents expect prices of goods and services to rise in the next 12 months, with an index of 43.1 points.

The Inflation Attitude Survey conducted by the CBN within the same period indicated consumers believed that the year would ebb with a weaker economy.

Highlights of the Survey Report, which was conducted by the Statistics Department of the apex bank showed, “respondents believe that the economy would end up weaker if prices start to rise faster than they do now” and that “given a trade-off between inflation and interest rates, more respondents prefer interest rates to fall than inflation rate.”