By Milcah Tanimu
Summary: The National Bureau of Statistics (NBS) reveals a reversal in the trend of household consumption expenditure, which had been declining since the second quarter of 2022. The NBS reports a year-on-year growth of 3.3% in real household consumption expenditure for the second quarter of 2023 (Q2’23), following a negative trend in the previous quarters.
Key Points:
- Reversal of Trend: The decline in household consumption expenditure, attributed to factors like inflation, saw a turnaround in Q2’23 with a positive growth rate.
- Inflation Impact: Analysts suggest that the rise in household expenditure is driven by inflation, forcing families to allocate more funds to essential needs such as food. The persistent increase in inflation has led to a decline in consumers’ purchasing power.
- Quarterly Changes: On a quarter-on-quarter basis, real household consumption expenditure decreased by 20.29% in Q1’23 but rose by 11.68% in Q2’23.
- Contributions to GDP: Household consumption accounted for 57.18% of real GDP at market prices in Q1’23 and increased to 64.05% in Q2’23.
Analysts’ Comments:
- Marvellous Adiele from Parthian Partners suggests that the growth in household expenditure is mainly driven by inflation, leading to increased spending on living expenses due to rising prices of goods and services.
- Olatunde Amolegbe, former president of the Chartered Institute of Stockbrokers, notes that families are now directing more income towards recurrent expenditure than savings and investments, primarily due to the impact of inflation on food and household items.
- Tajudeen Olayinka, CEO of Wyoming Capital and Partners, considers the positive growth in Q2 2023 a modest recovery influenced by the base effect. He emphasizes the need for additional efforts to ensure sustained positive growth in household consumption and, consequently, economic growth.