As the Monetary Policy Committee (MPC) meets, experts have called on the Central Bank of Nigeria (CBN) to keep monetary policy rates
According to experts, maintaining the status quo and strengthening intervention initiatives would be the most expedient decision to take given the prevailing economic condition in the country.Specifically, a Professor of Capital Market at the Nasarawa State University, Keffi, Uche Uwaleke said against the backdrop of elevated inflation at 17.
Uwaleke said in terms of economic growth, the Q1 2021 GDP report reflects an economy already on the path of gradual economic recovery with a positive real GDP growth rate following that recorded in the previous quarter.He argued that although the economy is still weak at 0.51 per cent, the manufacturing sector is now out of the negative territory increasing from -1.51 per cent to 3.40 per cent.
However, he noted that the report also revealed a disturbing pattern in the real GDP growth rate as declines were recorded in critical sectors of the economy such as Agriculture, ICT, Real Estate, and Transportation.“That the non-oil sector dropped should be of concern to the MPC. On the recently released inflation report for June by the NBS, it is difficult to interpret this marginal drop in headline inflation since April this year to mean a sustainable downward trend in the inflation rate.
“It is pertinent to note that inflationary pressure is coming more from the food component at over 20 per cent reflecting legacy factors such as inadequate power supply and transport challenges.”Therefore, he suggested that a hold-position would be the most expedient to support economic growth on the one hand and control inflation on the other hand.
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