NBS: Govt, Household Expenditures Responsible for GDP Decline in Q3, Q4 2016

Ndubuisi Francis

The National Bureau of Statistics (NBS) has stated that both household consumption and government consumption expenditures contributed to the fall in Gross Domestic Product (GDP) in the third and fourth quarters of 2016.

In a report titled: ‘National Gross and Domestic Product Report (Expenditure and Income Approach) for the third and fourth quarters of 2016’, the NBS also said year-on- year, growth in GDP declined by 2.34 per cent in the third quarter of the same year.

The country’s GDP contracted by 1.73 per cent in real terms, a situation the NBS said, resulted in continuation of the negative growth trend from the first half of 2016.

The NBS noted that a strong recovery in growth in net exports, particularly in the fourth quarter, helped to stem the decline.

Both household consumption and government consumption expenditures contributed to the fall in Gross Domestic Product (GDP) in the third and fourth quarters of 2016.

National Disposable Income also recorded a strong growth in comparison to the GDP in the second half of 2016 in real terms.

According to the NBS, “This is partly as a result of increases in ‘other net transfers from the rest of the world.”

Growth in domestic Compensation of Employees year-on-year declined in real terms, the report said, adding that operating surplus also declined in the third and fourth quarters but grew overall in real terms in 2016.

“In real terms, year-on-year, growth in GDP declined by 2.34 per cent and 1.73 per cent, in the third and fourth quarter respectively, continuing the negative growth trend from the first half of 2016.

“Both household consumption and government consumption expenditures contributed to the fall in the third and fourth quarters, however a strong recovery in growth in net exports, particularly in the fourth quarter helped to stem the decline.

“National Disposable Income recorded a strong growth in comparison to the GDP in the second half of 2016 in real terms.

“This is partly as a result of increases in “other net transfers from the rest of the world,” the report said.

According to the NBS, yearon-year growth, “domestic compensation of employees declined in real terms. Operating surplus declined in the third and fourth quarters but grew overall in real terms in 2016.

GDP is the value of all goods and services available for final use and export.

The country’s economy slipped into recession in 2016 after contracting for two consecutive quarters.

However, on September 5, the NBS announced that the economy had exited recession, growing by 0.55 per cent in real terms.