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Nigeria's growth drops, but oil looking up

03 March 2017

Wednesday's data show household consumption contributed 0.5 percentage points to GDP growth, with net exports contributing 0.2 percentage points.

The Australian dollar rose as much as 0.1 per cent immediately after the release by the Australia Bureau of Statistics, but quickly pulled back to be 0.1 per cent lower at $0.7652.

The contraction was a large improvement over the 2.24 percent year-on-year contraction in the third quarter.

Economic growth rebounded in the December quarter, shattering fringe predictions of a recession, as a surge in exports boosted the national income.

"The surge in February builds on a recovery from the sluggish performance in the third quarter of a year ago and marks a fifth month of expansion", said Australian Industry Group chief executive Innes Willox.

Growth was recorded in 15 out of 20 industries.

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Net exports added 0.2 percentage points to gross domestic product, having detracted from the growth rate in the previous quarter.

The NBS report revealed that the nation's GDP figures for the fourth quarter of 2016 contracted by -1.3 per cent, an improvement over the -2.24 per cent contraction of the third quarter of past year. "This is in line with the subdued wage price index (1.9 per cent through the year) and employment growth (0.7 per cent through the year) previously published by the ABS".

He said the report had raised the hope that Nigeria was gradually coming out of recession with the improving trends in several key sectors of the economy including agriculture and mining. Nigeria's economic woes were further exacerbated by a five-month delay in approving spending plans for 2016 needed to stimulate business activity.

Also, Senior Special Assistant on Media and Publicity to the Vice President, Laolu Akande, said the Federal Government is determined to bring about the full recovery of the economy and set it on a solid path of sustainable growth.

Commonwealth Bank chief economist Michael Blythe said the Reserve Bank should be happy with the growth numbers.

But it warned of "significant risks and uncertainties" ahead, including the rise in protectionist policies in the global economy and a significant slowdown in Australia's main trading partners.