Nigeria’s economy hints to grow by 1.5% in 2021 – JP Morgan

JP Morgan publicly stated that Nigeria’s economy is expected to grow less than analysts estimate, projecting the economy to only grow by 1.5% this year.

This was disclosed by JPMorgan Chase Bank NA analysts including Gbolahan Taiwo and Ayomide Mejabi in an email aired by Bloomberg on Wednesday afternoon.

The report included JP Morgan saying that Nigeria’s economy is likely to expand by 1.5% in 2021.

They mentioned  that the “continued lack of foreign-exchange liquidity, underlying economic weakness, an soon to come third wave of Covid-19 infections and a slow rollout of vaccines will likely slow the recovery process.”

JP Morgan’s estimates are lower than IMF’s forecast which Nairametrics reported in April. The International Monetary Fund lifted its global growth outlook to 6% in 2021 (0.5% point upgrade) and 4.4% in 2022 (0.2 percentage point upgrade), after an estimated historic contraction of -3.3% in 2020 due to the effects of the COVID-19 pandemic, citing that Nigeria is expected to grow by 2.5% in 2021 and 2.3% by 2022, while South Africa is projected to hit growths of 3.1% and 2.0% for the respective years in focus.

“Inflation rate, which was planned for 11.95% in 2021, has been reflected in reality because the exchange rate is high. The average we have so far is 15%.

We are expecting 2022 to go down slightly to 13%, then 11% in 2023, and 10% in 2024. The exchange rate of the Naira to the dollar, which was N379 in the 2021 budget, has been adjusted to the NAFEX rate of N410.15 to one US dollar.