The Central Bank of Nigeria has said the firms that participated in its latest business expectations survey expect borrowing and inflation rates in the country to rise further in the coming months.
The CBN said in its October 2020 Business Expectations Survey Report, released on Tuesday, that the respondent firms expressed pessimism on the macro economy.
It said they were however optimistic in their outlook for Nove mber with a confidence index of 37.9.
“Respondents’ outlook on volume of total order, volume of business activity, average capacity utilisation and financial condition (working capital) were positive. However, their outlook on access to credit was negative in October 2020,” it said.
The apex bank said the survey was conducted online from October 12 to 16, with a sample size of 1,050 businesses nationwide.
It said, “Respondent firms expect the naira to depreciate in the current month, but appreciate in the next month, next two months and next six months, as their confidence indices stood at -6.6, 8.4, 18.3 and 35.0 index points respectively.
“Respondent firms expect borrowing rates to rise in the current month, next month, next two months and the next six months with indices of 16.2, 13.5, 16.2 and 15.8 points respectively.”
According to the CBN, the firms expect the average inflation rate in the next six months and the next 12 months to stand at 13.30 and 13.55 per cent respectively.
“Respondent firms expressed dissatisfaction with the management of inflation by the government, with a negative net satisfaction index of -24.2 in October 2020,” it said.
The central bank said the respondent firms’ opinions on the volume of business activities indicated a favourable business outlook for November and December with indices of 56.2 and 62.7 respectively.
It said businesses also hoped to employ in November and December as the outlook was positive at 19.5 and 22.5 index points respectively.