The data released by the National Bureau of Statistics (NBS) showed that the real GDP grew by 2.98% year-on-year in Q1 2024, while this growth is higher than the 2.31% reported in Q1 2023, it is significantly lower than the 3.46% growth rate achieved in Q4 2023. The moderated economic growth in Q1 2024 highlights the ongoing macroeconomic challenges impeding overall productivity.

The oil sector, which rebounded to positive growth in Q4 2023, sustained its year-on-year growth momentum, achieving a real GDP growth of 5.70% in Q1 2024 (Q1 2023: -0.85%, Q4 2023: 12.11%).

The non-oil sector was largely pressured in Q1 2024, posting a year-on-year growth of 2.80%, marginally higher than 2.77% reported in Q1 2023, and down from 3.07% in Q4 2024.

Outlook

While we acknowledge the improvement in average oil production as reported by NBS due to efforts by authorities to curb oil theft and pipeline vandalism, we maintain that addressing the sector’s underlying issues such as weak infrastructure, and attracting investment inflows are crucial for enhancing sector’s productivity.

We expect a sustained pressure on the non-oil sector growth, we anticipate a sustained improvement in oil sector. Overall, we revise our projection for FY 2024 real GDP growth to close at 3.20% (previous: 2.95%).

Please follow the link “Q1 2024 GDP Report – Oil Sector Growth Sustained” to view the whole report.