There are indications that the sustained inflationary pressures in the economy may have forced a reversal of the trend in household consumption expenditure, with reference to Lagos, Nigeria.
The figures which have been going down since second quarter of 2022, Q2’22, reversed to an uptrend in 2023, according to the National Bureau of Statistics, NBS.
The NBS, yesterday, Thursday said that real household c o n s u m p t i o n expenditure grew year-on- year (YoY) by 3.3 percent in the second quarter of 2023, Q2’23.
The last growth was recorded in Q1’22 when it rose 8.66 percent. In second quarter of 2022, Q2’22, householdconsumption expenditure went negative, down to -5.21 percent and declined further to -5.83 percent in the third Q3’22.
In fourth quarter 2022, Q4’22, household c o n s u m p t i o n expenditure fell massively to -12.47 percent and it further plunged by -24.95 percent in the first quarter of 2023, Q1’23.
In its report entitled, ‘Nigerian Gross Domestic Product (Expenditure and Income Approach) Report for Q1 and Q2 2023’, the NBS stated:”Household final consumption, in real terms, grew by -24.95 percent and 3.30 percent in Q1 and Q2 of 2023 respectively, on a year-on-year basis.
“The observed trend since 2020 indicates that real household c o n s u m p t i o n expenditure declined in Q1 and Q2 of 2020, accounting for negative growth rates informed by the pandemic.
“However, positive growth rates were recorded since Q3’20 as recovery from the pandemic was witnessed, while growth became negative from Q2’22 to Q1’23 occasioned by rising prices, the cash crunch witnessed earlier this year as well as the current challenging economic conditions.
“Furthermore, growth in Q2’23 stood positive recorded at 3.3 percent, a departure from the negative trend recorded in the previous quarter.
“On a quarter-on-quarter basis, real household consumption expenditure decreased by 20.29 percent in Q1’23 and rose by 11.68 percent in Q2 of 2023. “ H o u s e h o l d consumption accounted for 57.18 percent of real GDP at market prices in Q1′ 23, and 64.05 percent in Q2’23”.
“This could be detrimental to capital formation and ultimately economic growth in the medium term if inflation is not addressed quickly.”
