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China’s Economic Woes Deepen as Demand Weakens Amid Lingering Property Crisis

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China faces deeper woes as demand weakens, particularly in the shadow of a lingering property crisis.

The latest official data, released on Friday, reveals a complex picture of the nation’s economic health, with industrial output and retail sales showing expansion in November.

However, analysts caution that these figures may be misleading due to favorable year-on-year comparisons when China was grappling with the initial impacts of Covid lockdowns.

While the official data suggests positive trends, experts argue that when compared to more typical periods, both measures of economic activity reveal signs of weakening.

The persistent turmoil in the property sector exacerbates concerns, as indebted developers struggle to sell new homes effectively.

Larry Hu, the Head of China Economics at Macquarie Group Ltd., pointed out, “Discounting the base effect, it’s obvious that China’s economy slowed further in November, especially in terms of retail sales and property.”

The property crisis has taken a toll on various economic indicators. Property development investment has plunged by 9.4% this year, reflecting the broader challenges faced by the sector.

Home prices, particularly in the secondary market, experienced their most significant decline in nine years, deepening the slump.

China’s economic recovery, which had already been hampered by the ongoing real estate crisis, faces additional pressure due to deflationary forces, indicating persistent weakness in consumer confidence.

The government, led by President Xi Jinping, now confronts heightened expectations to implement supportive measures for the economy as it strives to achieve ambitious growth goals in 2024.

Last month’s data is unlikely to alleviate concerns among investors regarding the sufficiency of the stimulus measures implemented thus far.

For instance, retail sales, a crucial economic indicator, reportedly fell by 1.9% last month compared to October, according to calculations by Macquarie economist Larry Hu.

This decline contrasts with the double-digit year-on-year growth reported in official data.

Louis Kuijs, the Chief Economist for Asia Pacific at S&P Global Ratings, emphasized that growth in retail sales, industrial output, and fixed-asset investment all weakened in November compared to October and 2019 levels.

He stated, “It’s very hard to see the economy growing significantly or people’s confidence improving significantly.

More needs to be done, apparently, just looking at how dire the situation is.” As China grapples with a multifaceted economic challenge, the need for decisive and strategic policy measures becomes increasingly apparent.

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Agricultural Sector’s Contribution to GDP Decreases in Q1 2024

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Nigeria’s agricultural sector declined in its contribution to the Gross Domestic Product (GDP), according to recent data released by the National Bureau of Statistics (NBS).

The sector, which encompasses crop production, livestock, forestry, and fishing, experienced a decrease in its nominal growth rate compared to the same period in 2023.

The data reveals that the agricultural sector grew by 0.77% year-on-year in nominal terms in Q1 2024, a decrease of 4.47% points from the corresponding quarter of the previous year.

This decline is significant, especially when compared to the growth rate of 14.94% recorded in the preceding quarter, showcasing a downturn of 14.17% points.

Crop production emerged as the primary driver of the sector, constituting 87.98% of the overall nominal value of the sector in Q1 2024.

However, despite its dominance, the sector’s contribution to nominal GDP stood at 17.22%, reflecting a decrease from the rates recorded in both the first quarter and fourth quarter of 2023, which were 19.63% and 24.65%, respectively.

In real terms, the agricultural sector experienced a modest growth rate of 0.18% year-on-year in Q1 2024, indicating an increase of 1.08% points from the same period in 2023.

Nevertheless, this growth rate represents a decline of 1.92% points from the preceding quarter, which recorded a growth rate of 2.10%. On a quarter-on-quarter basis, the sector’s growth rate stood at -32.25% in the first quarter of 2024.

Despite these challenges, the agricultural sector remains a vital component of Nigeria’s economy, contributing significantly to employment, food security, and overall economic development.

As the nation navigates through economic fluctuations, policymakers and stakeholders may need to explore strategies to revitalize and strengthen the agricultural sector to ensure its sustained growth and resilience in the face of future uncertainties.

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Nigeria’s GDP Grows by 2.98% in Q1 2024, Driven by Services Sector

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Nigeria’s Gross Domestic Product (GDP) grew by 2.98% in the first quarter of 2024 as the services sector sustained growth, the latest National Bureau of Statistics (NBS) report has shown.

This growth was higher when compared to the 2.31% recorded in the corresponding period of 2023, but lower than the 3.46% growth observed in the fourth quarter of 2023.

The report indicates that the services sector spearheaded this expansion as it grew by 4.32% in the period under review and contributed 58.04% of the aggregate GDP

Contrary to previous quarters, where the agriculture sector faced challenges, it rebounded modestly to post a 0.18% growth rate.

This positive performance marks a notable turnaround from the decline of -0.90% recorded in the first quarter of 2023.

Also, the industry sector recorded a growth rate of 2.19%, compared to the marginal 0.31% growth in the same period last year.

The aggregate GDP in nominal terms stood at N58,855,142.27 million for the first quarter of 2024.

Oil Sector First Quarter 2024

Delving into sectoral specifics, the oil sector posted a real growth rate of 5.70% year-on-year in Q1 2024.

Although this growth rate represents a decline from the previous quarter where it stood at 12.11%, the oil sector still contributed 6.38% of the total real GDP.

This performance revealed the sector’s continued importance despite ongoing global economic shifts and fluctuations in oil prices.

Non-oil Sector First Quarter

On the other hand, the non-oil sector expanded by 2.80% in real terms during the reference quarter.

This growth was predominantly driven by key sectors such as Financial and Insurance, Information and Communication, Agriculture, Trade, and Manufacturing.

In real terms, the non-oil sector contributed 93.62% to the nation’s GDP in the first quarter of 2024, lower than the share recorded in the first quarter of 2023 which was 93.79% and lower than the fourth quarter of 2023 recorded as 95.30%.

Despite the challenges posed by the global economic landscape and domestic factors, Nigeria’s GDP growth in the first quarter of 2024 shows resilience and potential for further expansion.

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Federal Government Disburses N260bn to Revitalize Primary Health Centres Nationwide

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The federal government has disbursed N260 billion to the 36 states to revitalise primary health centres (PHCs).

This initiative, announced by Muhammad Pate, the Coordinating Minister of Health and Social Welfare, will improve healthcare accessibility and quality for all citizens.

During a ministerial sectoral update organized by the Ministry of Information and National Orientation on Friday, Pate emphasized the urgency and importance of this investment.

“N260 billion is sitting right now at the state level for the revitalization of their primary healthcare centres,” he stated, highlighting the immediate availability of funds for this crucial sector.

The fund, part of which is sourced from the Basic Healthcare Provision Fund, is intended to upgrade and equip up to 17,000 primary healthcare centres nationwide.

This ambitious target aims to significantly improve the quality of healthcare services available to Nigerians, particularly in rural and underserved areas.

Pate noted the government’s strategic focus on primary healthcare as the foundation of a robust health system.

“Our goal is to ensure that every Nigerian, regardless of their location, has access to quality healthcare services. By revitalizing these primary health centres, we can provide essential health services closer to the people, thereby reducing the burden on tertiary healthcare facilities.”

The minister also pointed out that this financial injection would address several challenges faced by the PHCs, including inadequate infrastructure, lack of essential medical supplies, and insufficient staffing.

“This funding will enable states to renovate existing facilities, procure necessary medical equipment, and employ additional healthcare workers to meet the increasing demand for healthcare services,” Pate explained.

The disbursement of these funds is part of a broader strategy to strengthen Nigeria’s health system, which has faced numerous challenges in recent years, including the impact of the COVID-19 pandemic.

The revitalization of PHCs is seen as a critical step in achieving universal health coverage and improving health outcomes for all Nigerians.

Stakeholders in the healthcare sector have welcomed the government’s initiative, calling it a timely intervention that could transform the country’s healthcare landscape.

“This is a significant milestone for Nigeria’s healthcare system. The revitalization of primary health centres is essential for achieving sustainable health improvements and ensuring that every Nigerian has access to basic healthcare services,” said Dr. Adeyemi Adeniran, a public health expert.

The successful implementation of this initiative will require close collaboration between the federal and state governments, as well as active participation from local communities.

The Ministry of Health and Social Welfare has pledged to monitor the utilization of the funds to ensure transparency and accountability.

As the government embarks on this ambitious project, the hope is that it will not only enhance healthcare delivery but also build a resilient health system capable of addressing current and future health challenges.

With the N260 billion disbursement, the federal government has taken a significant step towards achieving this goal, reaffirming its commitment to the health and well-being of all Nigerians.

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