Global economy

The pace of global economic recovery remains slow. The International Monetary Fund’s (IMF) latest World Economic Outlook sees global output growth of 3.1% in 2016 and 3.4% in 2017. It is again obvious that the risks to its outlook are tilted to the downside. The Fund forecasts a decline of 15.4% for the average price of its basket of five crude oil blends in 2016, followed by a recovery of 17.9% in 2017. This is no cause for celebration and the picture could be worse without supply concerns in several producer states. Nigeria clearly features in this category.

At its last meeting, the European Central Bank (ECB) again held fire on any policy changes. However, the ECB will extend its asset purchase programme to December 2017 from the stipulated expiration of date of March 2017. Additionally, the ECB will reduce its monthly asset purchases to EUR60bn starting in April from the current EUR80bn. It reserved the right to increase CHAIRMAN’S STATEMENT “ Bello Maccido, Chairman ” I assure all the stakeholders that best corporate governance practices remain a key focus and deliverable for the Board of Directors and Management of the Bank. the size of purchases again. Inflation in the Eurozone picked up fractionally to 0.5% year-on-year in October, and so remained well below the target of close to, but below 2.0% year–on-year.

As expected, the Federal Open Market Committee (FOMC) delivered a rate hike at its latest meeting (to 0.50% to 0.75%), precisely 12 months after its first move. However, surprisingly the committee increased its expectations for the likely rate path in 2017 to three hikes as opposed to two, which was hinted in its September update.

The non-farm payrolls report for November showed an increase of 178,000 jobs, compared with 161,000 the previous month. The labour market has continued to open up. The initial response to the forthcoming change in administration had been a surge in US equities and in the US dollar.


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