ICYMI: Economy may slip back into recession, CBN warns
The Nigerian economy exited recession in 2017 after suffering contraction for five consecutive quarters.
Addressing journalists shortly after the two-day meeting of the MPC members held at the headquarters of the apex bank, the CBN Governor, Mr Godwin Emefiele, said the economy had started showing signs of weakness.
For instance, he said the committee was concerned that there was a fresh threat of recession as the economy recorded growth rate of 1.95 per cent and 1.5 per cent during the first and the second quarters of this year, respectively.
He noted that the slowdown emanated from the oil sector, with strong linkages to employment and growth.
For instance, the apex bank boss said the late implementation of the 2018 budget, weakening demand and consumer spending, rising contractor debts, and low minimum wage were some of the risks to output growth.
Others, according to him, are the impact of flooding on agricultural output, continued security challenges in the North-East and North-Central zones, and growing level of sovereign debts.
Emefiele stated, “The MPC observed that despite the underperformance of key monetary aggregates, headline inflation inched up to 11.23 per cent in August 2018 from 11.14 per cent in July 2018.
“The near time upside risks to inflation remain the dissipation of the base effect expected from 2019 election related spending, continued herdsmen attacks on farmers and episode of flooding, which destroyed farmlands and affected food supply ultimately.
“In this regard, the committee urges the fiscal authorities to sustain implementation of the 2018 budget to relieve the supply side growth constraints so that they can address the flooding, which has become perennial on a permanent basis.
