BY: FXTM Senior Research Analyst, Lukman Otunuga’s comments Nigeria Week ahead
Africa’s largest economy will reveal updates on its latest gross domestic growth figures in the week ahead.
Given how major and developing economies across the globe are feeling the impacts of escalating trade tensions between the US and China, there will be a special focus on Nigeria’s second quarter GDP figures for 2019.
Sentiment and overall confidence over the Nigerian economy will be dealt a major blow is the GDP data fails to meet market expectations.
Economic growth during Q2 is projected to expand 2.5% from the 2.01% witnessed during the first quarter of 2019.
The question on the mind of many investors is whether depreciating oil prices will negatively impact growth given how oil account for roughly 90% of export earnings.
A disappointing report should strengthen the argument for the Central Bank of Nigeria to cut interest rates in an effort to stimulate growth.
While the developments at home will certainly influence the Naira and local stock market, global growth concerns and overall market sentiment must not be overlooked.
Fresh signs of sizzling trade tensions between the two largest economies in the world, an appreciating Dollar and solid US jobs report on Friday will weigh on the Naira and possibly Nigerian stocks and risk sentiment dwindles.