As prices of goods and services continue to rise, Nigerians are spending their savings and taking out loans, although many are optimistic about the economic situation improving and incomes rising in the next six months.
According to the Central Bank of Nigeria’s (CBN) Household Expectations Survey for the month of July, which measured consumer expectations, the overall consumer outlook for July 2024 was gloomy, as consumers feared having to withdraw money from their savings or take loans.
The survey, conducted with a response rate of 99.7 per cent from 1,665 samples during the period July 22-26, 2024, showed that, on average, more households expected to increase spending on basic goods and services across all the periods under review.
Most consumers felt that the review period would not be an ideal time to purchase big-ticket items such as consumer durables, motor vehicles, building and real estate.
Similarly, he expected the naira to depreciate while the lending rate, inflation rate and unemployment rate to increase in the current month.
Respondents' households also believed that the economy would weaken rather than strengthen if prices began to rise faster than they are now. Given the trade-off between inflation and interest rates, most respondents would prefer lower interest rates.
Consumers have raised their outlook for the next six months by 2.7 points, as they expect economic conditions to improve and household income to rise. The overall outlook of consumers in July 2024 improved marginally to -41.7 points compared to the previous month.
This indicates that although pessimistic, fewer people expressed pessimism than in the previous month. The outlook in the month under review can be attributed to the deteriorating economic situation, deterioration in family financial situation and the projected decline in family income in the review period. Pessimism in the review period is projected to continue with indices of -21.8 and -9.1 points in the next month and the next three months, respectively.
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