Operating businesses in the country have projected a rise in inflation and borrowing rates this month and also a growth in confidence in macro economy as the fiscal year gradually inches to an end.
The views of the enterprises were captured in the Central Bank of Nigeria’s (CBN’s) ‘Business Expectation Survey’ report for November 2018, published on Tuesday.
The report indicated that respondent entities expected inflation rate to rise in both the November and December, 2018, with confidence indices of 7.0 and 3.4 points for the two months respectively.
Also, the report showed that respondent firms expected borrowing rates to rise in November and this month as the confidence indices stood at 5.8 and 2.2 points, respectively.
The apex bank reported further: “At 25.9 index points, respondents’ overall confidence index (CI) on the macro economy in November 2018 was more optimistic when compared to its level of 23.2 index points recorded in October 2018.
“The businesses’ outlook for December 2018 showed greater confidence on the macro economy at 65.6 index points. “The optimism on the macro economy in the current month was driven by the opinion of respondents from services (14.9 points), industrial (7.8 points), wholesale/retail trade (2.6 points) and construction (0.5 points) sectors, whereas the drivers of the optimism for next month were services (37.0 points), industrial (19.2 points), wholesale/retail trade (6.6 points) and construction (2.8 points) sectors.
“The positive outlook by type of business in November 2018 was driven by businesses that are neither import-nor export-oriented (18.9 points), import-oriented (4.5 points), both import-and export-oriented (1.8 points) and those that are export-related (0.7 points)”, the CBN added.
The report indicated further that the surveyed firms identified insufficient power supply (64.7 points), high interest rate (57.9 points), unfavourable economic climate (55.1 points), financial problems (51.2 points), unclear economic laws (51.0 points), unfavourable political climate (48.6 points), access to credit (41.3 points) and insufficient demand (41.2 points) as the major factors constraining business activity in the month under review – November.
