Gross domestic product fell by 6. 1% in the 3 months of June compared to the previous year, compared to an expansion of 1. 87% in the last quarter, the Abuja-based National Bureau of Statistics said Monday on its online page. estimated by six economists in a Bloomberg survey for a 4. 05% decrease. On a quarterly basis, genuine non-seasonal GDP declined to 5. 04% after falling to 14. 27% in the 3 months through March.
Oil production has fallen to 1. 81 million barrels 2. 07 million barrels in the past 3 months, the lowest level since the first quarter of 2017, when Africa’s economy contracted.
Crude oil contributes less than 10% to Nigeria’s GDP, but accounts for about 90% of foreign exchange earnings and part of government revenue, meaning that falling oil costs following the coronavirus pandemic, which hit when the economy recovered from a 2016 recession gaining ground, has tired coffers.
However, the drop in production was wider than crude oil: the oil sector contracted by 6. 6% compared to last year and the non-oil sector fell by 6. 05%, the first drop in non-oil GDP since the third quarter of 2017.
National stop
“The decline was largely due to particularly low levels of domestic and foreign economic activity during the quarter, which were the result of national closure efforts to involve the Covid-19 pandemic,” the statistics office said.
The economic outlook remains fragile. The International Monetary Fund predicts that Nigeria’s GDP will fall by 5. 4% this year, its biggest contraction in nearly 40 years. Goldman Sachs has cut its outlook to a contraction of 5% this year since its previous estimate of a 4. 2% drop. with an economic expansion of 0. 8% next year, the bank said.
“Knowledge shows that the national effects of blockade measures in reaction to the Covid-19 pandemic are significant,” Goldman Sachs economists Dylan Smith and Andrew Matheny said in a note, due to their increased reliance on crude oil production,” the bank’s central exchange rate policy,” they said.
What Bloomberg’s economist says
“We expect the economy to collapse in the third quarter, but at a slower rate than in the current quarter. However, the previous oil production target in April-June means deeper production cuts will be needed in August and September to complete OPEC Compliance. At the same time, a weaker naira and current exchange rate restrictions will continue to weigh on the expansion of the non-oil sector. “
This story was published from a firm thread without converting the text.
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