The Monetary Policy Committee has identified possible risks that could hamper the economic development of the country.
In a Central Bank of Nigeria’s communiqué released after the 113th meeting of the MPC in Abuja, the committee said that the downside risks to fundamental outlook to some economic variables include the possibility of low oil prices due to renewed investments in shale oil exploration and production, continuing monetary policy normalisation by the U.S. Fed, which may result in strengthening of the U.S dollar, and consequent capital reversal from Nigeria and other emerging economies.
Available data and various forecasts of key economic variables as well as assessment of government initiatives, including the recently released Federal Government Economic Recovery and Growth Plan, all point to prospects of recovery in 2017.
The Committee, however, expected that the timely implementation of this plan, judicious execution of the approved 2017 Budget and sustenance of the new foreign exchange implementation regime supported by the restoration of security in different parts of the country, especially in the Niger Delta region, would help to accelerate growth and restore confidence in the economy.
The MPC believes that the inflation outlook does not appear benign as the limit of the base effect driving the current moderation in prices may have been reached.
