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Nigerian growth 6.28 pct in Q2, inflation eases
by Joe Brock

Reuters Translate This Article
16 September 2012

ABUJA (Reuters) - Nigeria's economy grew 6.28 percent in the second quarter of this year, driven by non-oil sector growth, while inflation fell for the second straight month in August helped by tight monetary policy, the National Bureau of Statistics (NBS) reported.

GDP growth in Africa's second largest economy accelerated in the second quarter, up from 6.17 percent in the first quarter, which was the lowest quarterly rise in three years.

'The non-oil sector was driven by growth in activities recorded in the building and construction sector, while oil sector output decreased (compared with Q2 2011),' the NBS said in a report on Sunday.

Nigeria's economy is expected to expand at a slower rate this year, after rising 7.4 percent in 2011, due to disruptions to oil production and economic weakness in developed countries that buy its gasoline-rich crude.

Consumer inflation eased to 11.7 percent year-on-year in August, down from 12.8 percent in July, largely due to a fall in food inflation which dropped to 9.9 percent in August from 12.1 percent the previous month, NBS said.

Average crude oil output from Africa's largest producer rose marginally to 2.38 million barrels per day (bpd) in the second quarter, from 2.35 million bpd in the first quarter. This was down from 2.45 million bpd in the second quarter last year.

Oil accounts for more than 80 percent of Nigerian government revenue and around 95 percent of its foreign exchange earnings.

Although Nigeria's economy has been one of the fastest growing in the world, poor fiscal management, corruption and poor infrastructure has wasted some of these gains.

The NBS relies on data from the state-owned Nigerian National Petroleum Corp to compile its oil statistics.

It said high interest rates and lower food prices had helped temper inflation.

'The relative moderation in the index is attributable to the relative slower rises in both the Food and 'core' indices partly as a result of aggressive monetary policy initiatives by the Central Bank of Nigeria (CBN), base effects and a much lower rise in several food prices,' the bureau said.

The CBN monetary policy committee will meet next week and while the inflation numbers will feed some private sector demand for a loosening of monetary policy, most analysts are expecting rates to remain at 12 percent, as they have been since November last year. The rate decision will be announced on Tuesday.

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