The Director-General of the Budget Office, Ben Akabueze, said Nigeria may fall into recession by next quarter due to the effects of the pandemic on the economy and global crude oil demand.
Akabueze disclosed this on Thursday during a press parley.
Nairametrics reported on Monday that Nigeria’s Gross Domestic Product (GDP) declined by 6.10% (year-on-year) in real terms in Q2 2020, according to the second quarter (Q2) GDP report, released by the National Bureau of Statistics.
According to the numbers contained in the GDP report, the performance recorded in Q2 2020 represents a drop of 8.22% points when compared to Q2 2019 (2.12%), and 7.97% points decline when compared to Q1 2020 (1.87%).
The significant fall in Nigeria’s GDP numbers reflects the negative impacts of the disruption caused by COVID-19 pandemic and crash in oil prices on the Nigerian economy.
Nigeria’s biggest revenue earner, oil sector, recorded 6.63% (year-on-year) contraction in Q2 2020, indicating a decrease of –13.80% points relative to the rate recorded in the corresponding quarter of 2019.
A back to back negative GDP growth per quarter would be Nigeria’s second recession since 2016. The DG said, “Because of the twin effect of COVID-19 pandemic and the drop in oil price, subsequently that it is expected that Q3 will be negative and the country might fall into recession.”