Research Document: State of the Economy Q1 2024

Posted Thu, May 23, 2024 9:52 AM

Summary of Global economy in Q1’2024

1. Slower Economic Growth in Q1’2024: A combination of geo-political tensions in Europe and the Middle East, challenges in the Chinese Real Estate market and other socio-political factors constrained industrial performance in advanced and emerging markets

2.Commodity price volatility plateau: Aside from energy prices, there was a notable slowdown in prices of major commodities due to weak demand from major importing markets like China and Europe.

3.Inflation remains resilient but moderating: Despite a significant drop, progress has slowed, and there's been some uptick in countries with unique economic circumstances, such as Japan, Turkey, Nigeria, and others. However, improvements are expected in later parts of 2024.

4.Interest rate cuts and no rate change dominate decisions of key global monetary institutions. The world’s three biggest monetary policy institutions adopted a “no rate change” in the first quarter 2024.

What to expect in H1’2024 – The Real Economy

1. The real GDP growth is expected to improve in the first half of the year, eventually pushing the economy towards a real GDP growth between 3.0 - 4.5% in H1-2024

2. Inflationary pressure will amplify, erode purchasing power and result in a high cost of doing business. Prices will remain elevated in the first half of 2024.

3. Exchange rate is anticipated to appreciated significantly moving towards N900/US$ - N1000/US$ owing to FX market clarity and improved transparency. However FX illiquidity will remain a concern to sustaining exchange rate appreciation.