Rising inflation hobbles GDP growth, economic recovery

Adebayo Obajemu

Recent report published by the National Bureau of Statistics revealed that Household Consumption Expenditure, in Q1 and Q2 2021 grew by 43.72% and 48.16% in real terms, year on year. For 2020, the annual growth rate in real household consumption expenditure stood at 1.56% compared to -1.06% in 2019. Government Consumption Expenditure recorded growth rates at -4.57% and -53.56% in Q1 and Q2 2021 respectively, year on year, while annual growth rate stood at 61.58% in 2020 compared to 8.78% in 2019.

In the first quarter of 2021, Nigeria’s real GDP at basic prices grew by 0.51% on a year on year basis showing a steady improvement in the economy following 2020 Q4 GDP rate of 0.11%. Growth however, improved further in second quarter 2021 with positive GDP growth rate of 5.01%. The negative quarterly growths in Q2 and Q3 2020 resulted in a recession, this also led to a negative annual growth rate of -1.92% for 2020, compared to 2.27% in 2019 on a year on year basis.

Compared to the first and second quarters of 2020, the performance in 2021 indicated a decrease of -1.36% points and 11.12% points higher, respectively.

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