NIGERIAN ECONOMY TO GROW 6.5% IN 2012, INFLATION TO RISE 13.57%

According to the recently released Review of the Nigerian Economy in 2011 and Economic Outlook 2012-2015 by the National Bureau of Statistics, Nigeria is expected to grow its GDP by just 6.5% in 2012. This is lower that the 7.36% obtained in 2011. They have attributed this slow growth to external shocks arising from the Euro crisis, the slow down in the US economy and Chinese Economy. They also blame the fuel strikes of January 2011, inflation (which will be influenced by increase in pump price). Despite all of this, nominal GDP for the year 2012 is expected to rise to N42.63tr

Inflation is also projected to remain at double digits rate of 13.57 percent for 2012; 12.21 percent in 2013; 12.04 percent in 2014; and 11.91 percent in 2015 respectively. This gives me chills, as it means the CBN will still be bound to pursue its harsh contractionary policy of increasing MPR (Monetary Policy Rates) which continues to push interest rates higher.

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