Nigeria Business Confidence January 2016


Nigeria: Business confidence falls in January from December's one-year high

January 29, 2016

In January, the Business Sentiment Indicator (BSI) developed by MNI Indicators and Standard Chartered fell 8.7% from December’s one-year high of 67.6 to 61.7, which marked the lowest print since August 2015. That said, the index is firmly entrenched above the 50-threshold that separates contraction from expansion in business conditions.

While January’s decrease reflected losses in all the sub-components of the index, it was mainly felt in new orders and production. On the upside, the interest rate cut in December bolstered sentiment among businesses and both current conditions and future expectations for availability of credit reached a series high. Further, Standard Chartered analysts point out that, “the effect of the Nigerian naira (NGN) exchange rate was the main drag on overall business conditions yet again in January given uncertainty on the timing of an FX adjustment and persistent concern about the availability of FX for imports.”

FocusEconomics Consensus Forecast panelists expect gross fixed investment growth to reach 5.8% in 2016, which is up 0.8 percentage points from last month’s forecast. For 2017, panelists forecast an expansion of 7.4%.

Author: Ricard Torné, Lead Economist

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Nigeria Business Confidence Chart

Nigeria Business Confidence January 2016

Note: Business Sentiment Indicator. Readings above 50 indicate an expansion in business conditions while readings below 50 point to a contraction.
Source: MNI Indicators and Standard Chartered.

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