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First Post
17 hours ago
- Business
- First Post
How to grow a nation's GDP by 30% overnight? Nigeria knows the answer
Nigeria's 2024 GDP now stands at N372.82tn ($244bn) at current prices, up from the $187.76bn estimated by the World Bank. The magic lies in the statistics read more Nigeria's President Bola Tinubu looks on after his swearing-in ceremony in Abuja, Nigeria, on May 29, 2023. Reuters File Nigeria's economy is about 30 per cent larger than previously thought after the west African nation updated the method by which GDP is calculated, the first rejigging of its statistical model in more than a decade. Nigeria's 2024 GDP now stands at N372.82tn ($244bn) at current prices, up from the $187.76bn estimated by the World Bank, after the country's National Bureau of Statistics changed the base year from 2010 to 2019. This was done to account for previously excluded sectors such as a booming digital services industry, pension funds and the informal labour market, which employs most Nigerian residents. STORY CONTINUES BELOW THIS AD Emerging market economies are encouraged by development experts to regularly rebase their economies to better capture the size of their national output and produce economic data reflective of their nascent economies, Financial Times reported. Nigeria, Africa's most populous nation, last rebased its GDP in 2014. At the time, the change allowed it to surpass South Africa to become continent's largest economy, although it lost that crown in 2023. Following the latest rebasing, Nigeria's economy remains the fourth largest on the continent, behind South Africa, Egypt and Algeria. 'The rebasing exercise was timely,' said Michael Famoroti, an economist and head of research at Lagos-based data company Stears. 'It's usually good to do these every 10 years or so especially in developing countries when the economy can change quite a bit. Add the emergence in the digital economy in that period and we needed an updated picture of the economy.' Famoroti said the exercise had shown that a change in the composition of the Nigerian economy was well under way, with agriculture firmly cementing its place as the largest contributor to national output and crude oil 'barely' contributing, at 5 per cent. The rebasing makes certain metrics such as the country's debt-to-GDP ratio seem healthier. Nigeria's debt-to-GDP ratio was 52 per cent before the model change, but now stands at about 40 per cent. That is the same level as government's self-imposed 40 per cent mark and below the 55 per cent level encouraged by the World Bank and the IMF. STORY CONTINUES BELOW THIS AD 'My worry is that the higher GDP figure will embolden the government to be laxer with its debt sustainability,' added. 'The debt-to-GDP ratio has already declined on the back of this. But that's only masking the situation unfortunately.' Adeyemi Adeniran, head of the NBS, described the rebasing as the 'most comprehensive' ever carried out by the bureau at a press briefing in the capital Abuja. 'Digital activities, pension fund administrators and the informal sector activities, where more than 90 per cent of Nigerians are employed, are now being measured,' he said. Nigeria lost its status as Africa's biggest economy in 2023 after President Bola Tinubu devalued its currency to reflect its true value and attract foreign investment. The naira has lost more than 70 per cent against the US dollar since the measure was taken. Last week, Senegal's finance ministry said it would soon rebase its GDP for the first time since 2018, in the midst of a scandal over hidden borrowing that threatens to push its debt burden well over the current size of its economy. STORY CONTINUES BELOW THIS AD 'Rebasing could improve debt/GDP along with continued strong economic performance,' Bank of America analysts said. 'As such, the authorities may find this option appealing to resolve issues around the debt stock.' Senegal's dollar bonds have rallied since the announcement. The West African country's GDP currently uses 2014 as a base year. Last year, the IMF suspended a bailout for Senegal after billions of dollars in debt were misreported. The fund is waiting for the results of an investigation into the scandal.
CNBC
a day ago
- Business
- CNBC
China's affluent are as pessimistic about the economy as they were during the Covid-19 pandemic
BEIJING — China's affluent are feeling just as poorly about the economy as they did during the pandemic. That's according to a study of affluent Chinese released this month by consulting firm Oliver Wyman, which found 22% of respondents were negative about the economy when surveyed in May. It just exceeds the 21% seen in October 2022, just before Beijing announced plans to ease its stringent zero-Covid policy. When asked about the five-year horizon, respondents were far less upbeat than they were back in 2022. "That to us is a fundamental shift in mindset," Imke Wouters, partner at Oliver Wyman, told CNBC. "If you think, 'I'm not having a good financial situation now,' your spending, saving patterns will be very different." "The longer this [drags] on, the more negative they become about the long term future and the more cautious they come on spending," Wouters said. These findings come as China recorded a slowdown in retail sales growth, and persistent deflationary pressure as businesses slash prices to compete. Sliding prices in property, which accounts for the majority of household wealth, have also weighed on sentiment. Oliver Wyman's research was conducted from May 16 to 27. The firm has conducted similar surveys over the last three years. The latest study covered 2,000 households with a monthly income of over 30,000 yuan ($4,180). That's a fraction of consumers in China, where the per capita disposable income in urban areas for all of last year was 54,188 yuan. That's far less than the $64,474 reported for the U.S. as of December. Young people (aged 18 to 28) in the affluent income bracket who live in China's largest cities were the most pessimistic of the four age categories, recording the greatest drop in sentiment in May this year from April 2024, the survey showed. The unemployment rate for those aged 16 to 24 has remained in the mid-teens despite the overall jobless rate remaining far lower at around 5%. Survey respondents aged 29 to 44 were the most optimistic, especially when it comes to their five-year outlook. In China, most of the wealth sits with millennials and Gen X, Wouters said, referring to those broadly between the ages of 30 and 60. She attributed their relative optimism to higher levels of accumulated wealth and job stability, as well as the sense that the "good old days" might return — a perspective she suggested might come with age. China's official consumer confidence index has remained depressed since hitting a record low of 85 in November 2022, when China restricted movement in an effort to prevent Covid-19 outbreaks. The latest print was 88 as of May, according to the latest available data from the National Bureau of Statistics, accessed via Wind Information. People in China have become significantly discouraged by perceived "unequal opportunity," which in 2023 became the No. 1 reason respondents believe people are poor, jumping from No. 6 nearly two decades ago. That's according to the latest survey conducted in 2023 by a team of researchers led by Martin King Whyte of Harvard University and Scott Rozelle of Stanford University, who have been monitoring the shifts since 2004. The survey found that across all income brackets, more respondents thought their families' economic situation had declined in 2023 compared with previous years. But despite their negative sentiment on the economy, many affluent Chinese are more keen to travel internationally than they were just before the pandemic. Rather than spending on a luxury product, for example, they would rather "spend on something that can make [them feel] better now," Wouters said. "You just want to enjoy the moment," she said. Oliver Wyman predicts the share of affluent Chinese traveling internationally this year will reach 37%, above the 32% level seen in 2019, before the pandemic. So far, 27% of respondents have already traveled abroad, with 10% more expected to make a trip later this year. Still, affluent Chinese aren't necessarily traveling back to pre-pandemic hot spots such as the United States, the report said, noting that they are sticking closer to home instead. Chinese travel to Malaysia and Japan has already made a full recovery to 2019 levels, Oliver Wyman's analysis showed.
Express Tribune
2 days ago
- Business
- Express Tribune
China's GDP grows 5.3% in H1 despite global headwinds
Listen to article Defying all predictions, China's economy grew by 5.3% year-on-year in the first half of 2025, according to preliminary data released by the National Bureau of Statistics (NBS), as Beijing rejigged its trade strategy in the wake of US President Donald Trump's tariff offensive. Beijing stayed ahead of the curve and outmanoeuvred the trade assault by reconfiguring supply chains, broadening its export footprint beyond US markets and shoring up domestic demand to keep growth on track. The overall size of GDP reached 66,053.6 billion yuan ($9.1 trillion), demonstrating China's resilience despite global economic headwinds. The 5.3% GDP growth was higher than the average prediction of 5.1% made by 40 economists interviewed by Reuters. "This is a hard-won achievement, particularly considering the sharp fluctuations in the international situation and heightened external pressures since the second quarter," said NBS Deputy Commissioner Sheng Laiyun. He credited the "highly valuable" numbers to stable progress in the implementation of macro-policy, industrial growth topped by high-tech industries and 68.8% from domestic demand. The breakdown shows that the primary industry contributed 3,117.2 billion yuan, with a YoY increase of 3.7%, driven mainly by stable production in agriculture. The secondary industry accounted for 23,905 billion yuan, up 5.3%, and the services sector witnessed the highest growth, contributing 39,031.4 billion yuan, up 5.5%. China's GDP grew 5.4% YoY in the first quarter and 5.2% in the second, showing steady economic momentum despite the global turmoil spawned mainly by Trump's trade tariffs. The manufacturing sector continues to be the engine of China's economic growth. Industrial output grew 6.8% YoY in June, a sharp pickup from May's 5.8% growth. High-tech industries, new-energy cars and robotics industries were the main drivers of growth, showing the country's strategic focus on technological independence and industrial upgrade. "China will still pursue high-level self-reliance and strength in science and technology," said Wen Bin, Chief Economist of China Minsheng Bank. He believes new schemes, such as the science and technology bond board and associated financial instruments, would further boost tech-led development. High-tech production rose by 9.7% in June, contributing to overall industrial growth. Industries like electric vehicles (EVs), lithium batteries and high-end machinery are witnessing consistent demand both locally and globally. The Chinese government has been promoting industrial innovation through subsidies that target specific sectors, tax breaks and investment incentives, further cementing the sector's growth. "Booming industries, especially the use of digital and green technologies, drove tremendous breakthroughs across industries — illustrating the pace of the nation's technological advances," said Peking University Economist Cao Heping. Despite ongoing global trade uncertainties, Chinese exporters have benefited from reviving international demand and a short-term trade truce with the US. In June 2025, exports expanded by 5.8% YoY, after a 4.8% rise in May. This is the best export growth since mid-2024. Hu Qimu, Deputy Secretary-General of the Forum 50 for Digital-Real Economies Integration, told Xinhua: "The first-half GDP growth reflects the strong resilience of China's economy, underpinned by its comprehensive industrial system and vast market capacity." China's total exports went up by almost 6% in the first half of 2025, ensuring a healthy trade surplus of about $586 billion. Exports to Southeast Asia shot up by 16.8% YoY, showing the country's increasing trade partnership with regional members via agreements like the Regional Comprehensive Economic Partnership (RCEP). China's huge domestic market remains a pillar, supporting long-term economic expansion. Retail sales rose 4.8% in June, after higher 6.4% gains in May. The moderation is attributed by analysts to a mix of risk-averse consumer behaviour and gradual rebalancing in the real estate market. Still, policy measures to spur consumption, such as subsidies for environmentally friendly appliances, electric cars, and rural revitalisation measures, are helping to support it. The introduction of "trade-in" programmes for home appliances and incentives for car replacements have moderated some consumers' wariness. The services sector also recorded a good 5.5% expansion in the first half, reflecting steady demand across segments like transport, finance, health care and internet services. The services industry now represents virtually 60% of China's GDP, highlighting the nation's shift to a more consumption- and services-based economy. The policymakers have used a cautious yet bold strategy to maintain economic growth. The People's Bank of China (PBoC) slashed interest rates earlier this year and pumped in liquidity to stimulate lending and spur business activity. Targeted fiscal policies have aimed at upgrading infrastructure, high-tech industry, and small- and medium-sized enterprises. China has given emphasis to structural change and specific interventions. "China's economic performance this year is a visible rebound and upturn — owing primarily to more solid macroeconomic policies, pointing to a string of monetary easing measures — and a significant boost in fiscal spending," writes Xi Junyang, Professor at Shanghai University of Finance and Economics. International economists are of the view that this strategy demonstrates faith in the intrinsic health of the economy and avoids over-expansion of credit. Considering the Chinese economy's stable path, a number of global financial institutions such as Goldman Sachs, Deutsche Bank and Morgan Stanley have now upped their projections for the country's economic growth rate in 2025. Local authorities have been given the ability to speed up infrastructure expenditure and bring forward strategic projects, such as digital economy centres and renewable energy facilities, further supporting growth. The provisional trade truce with the US, reached in May 2025, has brought welcome relief for Chinese exporters. Analysts foresee a YoY growth in the 5-5.2% range, slightly higher than the government's official target. They believe China's push for high-quality, innovation-based growth is setting the foundation for long-term development. The government's measures to spur domestic demand, promote green technologies, and stabilise property markets are seen supporting the economic momentum. The writer is a student and independent contributor
Spectator
4 days ago
- Business
- Spectator
Is China cooking the books on its economy?
A Western financial analyst based in Shanghai once described China's economic statistics to me as 'one of greatest works of contemporary Chinese fiction'. Not even the Communist party's (CCP) own officials believed them. A cottage industry of esoteric techniques developed to try and measure what was really going on, ranging from diesel and electricity demand to the fluctuating levels of the country's chronic air pollution, car sales, traffic congestion, job postings and construction – even the sale of underwear or pickled vegetables. One enterprising analyst regularly sent spies to Shanghai port to count the ships and throughput of trucks. I thought about that conversation again this week when China's National Bureau of Statistics published new figures claiming that the economy grew by 5.2 per cent in the three months to the end of June and thereby 'withstood pressure and made steady improvement despite challenges'. Growth figures have always been political rather than economic in China but have become even more so as Beijing seeks to demonstrate that its economy is resilient enough to withstand any further tariffs that Donald Trump might throw at it should their fragile trade truce break down. I have no idea what new techniques the hapless Shanghai analysts are now deploying, but questioning the official figures has become increasingly dangerous in the China of President Xi Jinping. Shortly before Christmas, Gao Sanwen, a top economist and former official at China's central bank, cast doubt on official figures, telling a conference in Washington DC that China's growth over recent years was likely just 2 per cent, which is less than half what the government had claimed. Gao then promptly disappeared from view. Online commentaries in which he had also highlighted soaring unemployment, China's 'dispirited youth' and 'disenchanted middle-aged' were deleted by censors. A few months earlier, Zhu Hengpeng, a top economist with the Chinese Academy of Social Sciences' Institute of Economics also disappeared after making disparaging remarks about Xi Jinping's economic stewardship in what he thought was a private online chat group. It is more difficult than ever to tell what is really going on with the Chinese economy since the CCP has effectively criminalised pessimism. The Ministry of State Security, its main spy agency, has declared that gloom about the economy is a foreign smear and that 'false theories about 'China's deterioration' are being circulated to attack China's unique socialist system'. It could well be that China's economy did get a bounce in the three months to the end of June as factories ramped up production and pumped out more exports in order to beat any future tariffs. The government has also attempted to boost consumer demand with a trade-in programme worth an estimated $42 billion (£31.3 billion) so far this year, covering a range of consumer goods, from washing machines to electric vehicles (EVs), air conditioners, smartphones and tablets. Xi has pledged to 'fully unleash' China's consumers, but retail sales actually slowed in June, with consumers cautious in the face of a continuing property slump and a deteriorating jobs market. Housing accounts for around 70 per cent of Chinese household wealth, and with prices continuing to fall, consumers appear to be in no mood to be unleashed. Meanwhile, the CCP has begrudgingly acknowledged that the economy is chronically overproducing, notably in renewable tech, such as batteries, EVs and solar panels – though the party will not bring itself to use that term. Instead, it has embraced the term 'involution' (neijuan in mandarin), which describes what it sees as unhealthy and self-destructive competition, which it acknowledges is fuelling deflation and undermining growth. What it doesn't acknowledge is that this is a direct result of its own policies – the enormous subsidies thrown at these industries, which in turn is fuelling global wariness about being the target of Chinese exporters desperate to dump this stuff. The CCP has set a full-year growth target of around 5 per cent, and by hook or by crook it will hit that, no matter what is really going on in the economy. It is not simply a matter of the Chinese government cooking the books, since creating this particular work of fiction is more complex than that. The Chinese economy is a surreal organism, which simply can't be measured by the tools that would usually be brought to bear in other developed economies. The system creates perverse incentives whereby officials at every level are under enormous pressure to manipulate data in order to be seen to fulfil the party's growth targets, for which they are rewarded or punished. Add to that mix a brewing trade war with America and you are left with statistics that are more political and untrustworthy than ever. My Shanghai analyst soon found another proxy for measuring economic activity – the throughput of visitors at Shanghai Disneyland. I said that felt a little far-fetched, which he acknowledged, but pointed out that a morning in the company of Mickey Mouse was a lot more fun and potentially more productive than dealing with officials at the National Bureau of Statistics.
RTÉ News
5 days ago
- Business
- RTÉ News
China's economy grows 5.2% on trade war truce
China's economy expanded more than 5% in the second quarter, official data showed today, buoyed by strong exports but analysts warned that more was work was needed to address sluggish consumer demand. The figures offer a rare bit of good news for the country's leadership as it fights a multi-front battle to kickstart growth - a challenge made all the more difficult by Donald Trump's tariff war. But the knock-on effects of the trade turmoil abroad and persistent sluggish consumption mean the economy could slump in the second half of year, analysts warned. The US president has imposed tolls on China and most other major trading partners since returning to office in January, threatening Beijing's exports just as it becomes more reliant on them to stimulate economic activity. The two superpowers have sought to de-escalate their row after reaching a framework for a deal at talks in London last month, but observers warn of lingering uncertainty. Beijing's National Bureau of Statistics (NBS) said today that the Chinese economy grew 5.2% in April-June, matching a prediction by an AFP survey of analysts and topping an official growth goal for the year set by the government. But it marked a slowdown from the 5.4% seen in the first quarter, which was boosted by exporters rushing to shift goods ahead of swingeing US tariffs kicking in. "The national economy withstood pressure and made steady improvement despite challenges," NBS deputy director Sheng Laiyun told a news conference. "Production and demand grew steadily, employment was generally stable, household income continued to increase, new growth drivers witnessed robust development, and high-quality development made new strides," he said. "The figures probably still overstate the strength of growth," Zichun Huang, China Economist at Capital Economics, said in a note. "With exports set to slow and the tailwind from fiscal support on course to fade, growth is likely to slow further during the second half of this year," Huang added. Chinese retail sales rose 4.8% year-on-year, below a forecast in a Bloomberg survey of economists, suggesting efforts to kickstart consumption have fallen flat. The weak readings come even as Beijing tries to shift towards a growth model propelled more by domestic demand than the traditional key drivers of infrastructure investment, manufacturing and exports. Factory output meanwhile gained 6.8%, higher than the estimate - reflecting continued high demand for Chinese exports that has boosted growth. More deflation But analysts warn that strong exports could be driving deflationary pressures and further dampening already sluggish consumer demand. "Recent efforts to boost spending, such as the broadening of the consumer goods trade-in scheme earlier this year, did temporarily lift retail sales," said Sarah Tan, an economist at Moody's Analytics. "However, this support proved unsustainable, with funding reportedly drying up in several provinces. The scheme's limitations highlight the need for policymakers to address the deeper structural challenges behind consumer caution," she added. Data last week showed consumer prices edged up in June, barely snapping a four-month deflationary dip, but factory gate prices dropped at their fastest clip in nearly two years. "The economy posted a solid first half, supported by resilient exports, though this momentum is contributing to deepening deflationary trends," Louise Loo, Head of Asia Economics at Oxford Economics, said in a note. "The cost of strong exports is more deflation," she said. Disagreements also persist between Beijing and Washington, despite the framework agreement reached last month. Trump upped the ante yesterday, warning Russia's trading partners that he will impose "very severe" tariffs reaching 100% if Moscow fails to end its war on Ukraine within 50 days. Western nations have repeatedly urged China - a key commercial ally of Russia - to wield its influence and get President Vladimir Putin to stop his three-year-old war with Ukraine. "The economic outlook for the rest of the year remains challenging," Capital Economics' Huang said. "With tariffs set to remain high, fiscal ammunition being depleted and structural headwinds persisting, growth is likely to slow further over the second half," she said.
