Declining Economic Condition Worsens Consumer Confidence, CBN Says
Consumers’ overall outlook was negative in the first quarter of 2020, as consumers were pessimistic in their outlook, according to the Central Bank of Nigeria.
The Statistics Department of the CBN revealed in its Consumer Expectations Survey Report for Q1 2020, however that consumers had a positive outlook for the next quarter and the next 12 months.
Part of the report stated, “The consumers’ overall confidence outlook dipped in Q1 2020, as consumers were pessimistic in their outlook.
“The index at -0.3 point was 5.1 points lower than the index in the corresponding period of 2019.”
Respondents attributed this unfavourable outlook to declining economic conditions.
The consumers were, however, optimistic in their outlook for the next quarter and next 12 months with indices of 28.9 and 43.3 points, respectively.
It stated that this positive outlook could be attributed to the expected increase in net household income, expectations to save a bit and/or have plenty over savings and an anticipated improvement in Nigeria’s economic conditions in the next quarter and the next.
The CBN stated that most respondents expected prices of goods and services to rise in the next 12 months, with an index of 22.9 points.
The major drivers were medical expenses, education, telecommunication, savings, purchase of houses, and food and other household needs, it added.
It stated that the overall buying conditions index for big-ticket items in the current quarter stood at 24.4 points.
This indicated that majority of consumers believed that the current quarter was not the ideal time to purchase big-ticket items like consumer durables, motor vehicles and house and lot.
Overall buying intention index in the next 12 months stood at 32.5 index points, indicating that most consumers did not intend to buy big ticket items in the next 12 months.
The buying intention indices for consumer durables, motor vehicles and house & lot were below 50 points, indicating that respondents had no plans to make these purchases in the next 12 months
Part of the report read, “With indices of 2.2 and 11.7 points, respectively, consumers expect the borrowing rate to rise, but expect the naira to appreciate in the next 12 months.”
It added that the unemployment index for the next 12 months remained positive at 27.7 points in Q1 2020, indicating that consumers generally expected the unemployment rate to rise in the next one year.