Addressing reporters at the end of the bi-monthly Monetary Policy Committee Meeting in Abuja yesterday, CBN Governor Godwin Emefiele said “forecasts of key macroeconomic indicators point to a fragile economic recovery in the second quarter of the year”.
”The Committee cautioned that this recovery could relapse in a more protracted recession if strong and bold monetary and fiscal policies are not activated immediately to sustain it,” he stressed.
To guard against this, the MPC noted that “the expected fiscal stimulus and non-oil federal receipts, as well as improvements in economy-wide non-oil exports, especially agriculture, manufacturing, services and light industries, all expected to drive the growth impetus for the rest of the year, must be pursued relentlessly.”
The Committee said it “expects that timely implementation of the 2017 Budget, improved management of foreign exchange, as well as security gains across the country, especially, in the Niger Delta and North Eastern axis, should be firmly anchored, to enhance confidence and sustainability of economic recovery”.
The MPC of the CBN also expressed concern over the increasing fiscal deficit estimated at N2.51 trillion in the first half of this year. Emefiele lamented “the crowding out effect of high government borrowing.” He called for “fiscal restraint to check the growing deficit” and also disclosed that the committee had once again resolved to retain lending rates at 14%.
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