Coronation Merchant Bank has predicted that the foreign exchange liquidity crisis affecting the economy may persist for an extended period. This insight was shared by the Chief Economist of Coronation Bank, Chinwe Egwim, in a statement on Wednesday during the launch of the bank’s 2023 Economic Review and Outlook report. The report focuses on trends in core macroeconomic indicators and relevant emerging policy themes that are expected to shape the economic landscape in 2023. Titled “Baton Hand-Off: Economic Headwinds and Expected Resilience,” the report outlines a mix of economic conditions anticipated for the year.
Egwim noted that the current inflation trend is likely to continue in both advanced and emerging economies. She explained that the effects of monetary policy tightening are expected to persist, albeit at a reduced pace, due to the inflation outlook across markets, which suggests a gradual moderation in the second half of 2023. Specifically for Nigeria, she indicated that foreign exchange liquidity constraints are likely to remain in the near term, particularly given that it is an election year. There are concerns regarding demand-pull inflation resulting from increased naira circulation associated with electioneering activities. However, Egwim mentioned that the recent naira redesign policy could help mitigate this inflation risk.
Furthermore, she expressed concerns about policy continuity after the elections and the anticipated slowdown in economic activity during the transition phase. Despite these challenges, Nigeria’s GDP growth is expected to maintain its upward trajectory, although at a relatively slower pace in 2023. In commenting on the report, Banjo Adegbohungbe, the MD/CEO of Coronation Merchant Bank, remarked that the impact of recent global economic shocks on the Nigerian economy was evident in 2022 and is expected to continue into 2023. However, he emphasized that there will be opportunities for new growth, particularly in the latter half of the year. He described the report as a valuable tool for decision-makers, aiding clients, investors, and stakeholders in navigating the current economic environment and achieving their strategic goals.
The report encompasses various topics, including global economic headwinds, growth trends, inflationary pressures and expectations, dynamics in the domestic oil market, exchange rate expectations, and insights regarding monetary and fiscal policies, as well as sectoral trends.
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