In spite of increased risk and uncertainty abound naira exchange rate from further declining in the price of crude oil, which dropped below $50 per barrel last week, experts and consumers across the country anticipate the naira to appreciate in 2019.
According to Vanguard, expectations are also high on the drop in the inflation rate, interest rate and unemployment rate in the year ahead.
Meanwhile, the Manufacturing and Non Manufacturing as well as Purchasing Managers Indexes of the Central Bank of Nigeria, CBN, hit an all time high of 61.7 percent in December, indicating economic expansion occurred at a faster pace during the month under review.
Additionally, the CBN last week intensified its liquidity mop activities, as it mopped up N1.07 trillion from the interbank money market. Naira
Again, consumers anticipate naira appreciation Prompted by expected increase in net household income, improvement in Nigeria’s economic conditions, the consumers’ overall confidence outlook rose to 28.4 percent for the next 12 months, from 9.7 percent recorded for fourth quarter of the year 2018 (Q4’18), with consumers across the country expecting the naira to appreciate in 2019.
In contrast, some consumers expressed fears over inflation rate, interest rate and unemployment to rise in the New Year. These were highlights of the Consumer Expectation Survey (CES), report for the fourth quarter of 2018 released by the CBN at the weekend.
The report further stated that the consumers’ overall confidence outlook improved in Q4, 2018, as more consumers were optimistic in their outlook. The index at 9.7 points was 8.7 points higher than the index in the corresponding period of 2017.
According to the survey, respondents attributed this favourable outlook to improved family income, family financial situation and economic condition. The consumer outlooks for the next quarter and the next 12 months were positive at 33.2 and 28.4 points, respectively.
This outlook could be attributed to the expected increase in net household income, the anticipated improvement in Nigeria’s economic conditions and expectations to save a bit and/or have plenty over savings in the next 12 months.
Most respondents expect prices of goods and services especially, seasonal and agricultural commodities to rise in the next 12 months, with an index of 13.3 points. The major drivers are rent, food and other household needs, telecommunication, electricity, debt payment and purchase of houses. With indices of 5.0 and 6.6 points, consumers expect the borrowing rate to rise while the naira is expected to appreciate in the next 12 months.
In the same vein, unemployment index for the next 12 months(January to December, 2019) remained positive at 29.3 points in Q4, 2018, indicating that majority of the consumers expect the unemployment rate to drop in subsequent months.
