Survey predicts vibrant public sector performance in H2 2017

Survey predicts vibrant public sector performance in H2 2017


Available economic indicators have shown that the recently introduced investors and exporters foreign exchange window is expected  to  have  a  positive  medium  to  long -term  impact  on  the foreign exchange market.

According to the Cowry Asset Management Market Review for H1 2017, and the outlook for H2, this will be made possible because the market is expected to deepen further as authorised dealers encourage their corporate clients to on-board the FMDQ and advise foreign exchange trading  system,  in  order  to fast-track  the  migration  of  the  activities  of  investors   and exporters  of foreign  exchange  window into  the  foreign  exchange  trading system,  and  thereby  enhance  market  transparency and efficiency.

Relatively, an H2  2017 CBN business  expectations  survey  also showed that business owners  were more  optimistic  about  conditions  in  the last  quarter at 47.5 points, compared to previous quarters which stood at about 28.2 point. Insufficient power supply was cited as the biggest constraint to businesses, followed by access to finance and high interest rate

The survey noted that most  businesses  expected  the  naira  to  appreciate  in  the  next  quarter –on  the back  of a recent  policy  intervention in  the  foreign  exchange  market;  while  inflation  rate  and borrowing rates were expected to decline in the next quarter.

It added that the global economic activities continued to wax strong in the H1 amid sustained expansion in both manufacturing and services sectors.

“The boost in the global economy, which was driven by developed economies, was partly attributed to a number of factors such as relatively low crude oil prices   which   was   particularly   beneficial   to   advanced economies, accommodative monetary policy stance  in  developed  economies,  and improvement   in business and consumer sentiments.

“However, commodities-dependent economies were negatively impacted by relatively weak prices which led to weakened balance of payment positions and increased cost-push inflation, amongst other things,” the report said.