The latest Global Economic Conditions Survey (GECS), from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants) reveals economic confidence in Nigeria in Q4 2029 dips below its long run average over the year, but orders remain comfortably above both recent and long run averages.
Thomas Isibor, head of ACCA Nigeria says: ‘The World Bank expects Nigeria’s GDP growth to be maintained at around 2% in 2020. The economy remains heavily dependent on oil where neither prices nor output look likely to boost the economy this year. In addition, the closure of Nigeria’s land borders last year to reduce smuggling has pushed up inflation, especially in the food category.
‘Double-digit inflation means that tight monetary policy will continue to act as a moderating influence on economic growth, which will remain below the rate needed to increase GDP per capita.’
The global picture
Global economic confidence bounced back in Q4 2020, to around its level in mid-2019. The global poll of 2,560 accountants shows that all key regions reported a bounce in confidence and the most confident part of the global economy was again South Asia and the Middle East.
In Q4, GECS’s inflation measure fell to the lowest level in three years at 42%. Inflation in developed and many developing economies is running at low levels. Indeed, in some cases concerns are growing that inflation is too low such that deflation cannot be ruled out
Looking ahead, the GECS report takes an in-depth year ahead look at the prospects and risks facing the global economy in 2020, predicting that after slowing in 2019 the global economy is likely to expand at a steady if modest rate this year of close to 3%. It also says that the risks of 2019 will mainly persist into 2020, including a re-escalation of trade tensions, geopolitical risks especially in the Middle East, high levels of emerging market debt and the UK-EU trading relationship post-Brexit.
Speaking of the global picture, Michael Taylor, ACCA’s chief economist added: ‘Many risks to the global economy in 2020 are the same as in 2019, including trade tensions between the US and China, which were a major cause of slowing global growth. Recent developments in this area have been positive, but risks of a re-escalation with renewed tariff increases remain. The Middle East is the current focus of geopolitical risk although the potential for conflict here to hurt the global economy through a surge in oil prices is much reduced.’
Thomas Isibor concludes: ‘What our GECS Q4 2019 emphasises is the fact that individual country’s economies are hyper-connected. Social, political or fiscal movements in one country affect another, sometimes very powerfully. There are risks ahead which need to be managed very carefully, such as debt levels which are elevated and increasing in many emerging markets.’
GECS Q4 2020 can be found online at: https://www.accaglobal.com/gb/en/professional-insights/global-economics/GECS_Q4_2020.html