In the data released by the National Bureau of Statistics (NBS), real GDP recorded a 3.46% year-on-year growth in Q4 2023, surpassing the 2.54% growth reported in Q3 2023. This highlights the resilience of the economy in Q4 2023, notwithstanding the persistent macroeconomic challenges that characterised the quarter. Nonetheless, it is important to note that Q4 2023 growth fell shorter than 3.52% achieved in Q4 2022. Real GDP for FY 2023 grew by 2.74%, slightly surpassing our projected growth of 2.72%, yet a decline from the 3.10% growth recorded in 2022.

The Oil sector witnessed a year-on-year real growth of 12.11% in Q4 2023, a rebound from the consecutive declines in the sector since Q2 2020. Despite this growth, the sector’s contribution to total GDP was 4.70% in Q4 2023, a decline from 5.48% in Q3 2023, but higher than the 4.34% in Q4 2022.

In Q4 2023, the non-oil sector grew year-on-year by 3.07% in real terms, up from 2.75% in Q3 2023. This improvement reflects enhanced economic activities during the quarter. However, compared to the 4.44% growth reported in Q4 2022, the sector’s real growth declined, highlighting the persistent challenges faced by subsectors within the non-oil sector in Q4 2023.

Outlook

The sustained improvement in oil production beams hope for the sector. As the authorities continue to intensify its efforts to combat oil theft and also embark on revitalising dormant oil fields in 2024, it is expected that the sector’s contribution to the total GDP will improve.

We are cautiously optimistic about the growth in the non-oil sector for 2024, as the subsectors continue to face challenges. Overall, we downgraded our projection for FY 2024 GDP growth to 2.95% from 3.02% in our economic outlook.

Please follow the link “Q4 2023 GDP Report – Oil Sector Rebound Beams Optimism” to view the whole report.