Country Economic Forecasts > Nigeria

GDP growth recovered a little in Q3 to 2.8% from 2.4% in Q2, with the services sector still the main driver of growth. But industry continues to struggle, falling for a third consecutive quarter albeit at a slower pace than in Q2. With the Q3 result significantly weaker than expected, and oil prices remaining low, we have cut our 2015 GDP growth forecast to 3.1% from 3.7% last month. We still expect a pick-up in growth in the coming years, but now only to 3.8% in 2016 and then about 5% a year in 2017-18.Headline inflation edged down to 9.3% in October from 9.4% in September, with price pressures easing temporarily as the impact of a weaker naira starts to fade and as domestic fuel prices also fall. But delayed subsidy payments may push fuel prices higher towards end-2015, while utility tariff hikes are also expected soon, so inflation is seen rising to just over 10% in 2016.With inflation having slowed a little, the CBN has taken the opportunity to try to support growth, cutting the key MPR rate by 200bp to 11% at its policy meeting on 24 November. It has also adopted an asymmetric corridor (+200bp / -700bp) around the MPR and lowered reserve requirements from 25% to 20%.