Vetiva Research has released its second half (H2) 2021 outlook report on the fast moving consumer goods (FCMG) space, predicting a rebound for the sector.
In the report, Vetiva stated its expectation of improved performances across board amid the constraints to consumer purchasing power.
Noting the rebound in the consumer goods sector from the depressed levels in the previous year, the Consumer Goods Analyst at Vetiva, Chinma Ukadike, also focused on the expectations for three sub-sectors in the FMCG space.
According to her, the food segment the resilience displayed by the subsector in the past year, would persist in the coming half year, due to the defensive nature of the segment and despite inflationary pressures.
Whilst noting the rate of vaccinations achieved and what the new strains may mean in achieving herd immunity, Ukadike’s outlook for the brewery sector especially inQ2’21 is very optimistic and is based on two drivers.
First is the low base effect from the Q2’20 period and the rebound in economic activities in this quarter will further support growth in this segment. She also expects a similar sentiment in the Home and Personal Care segment of the market, once again driven by the beauty segment in response to increased physical social interactions.
Although the analyst expects costs rising in the period, amid inflationary pressures, she sees little frame for price increases. On Q2 performances, she remains optimistic as she expects the low base from the severe depression in the lockdown period to support growth in this year.
Vetiva Research had recently said the Nigerian economy could grow by 3.1 per cent in 2021. A panoramic view of the Nigerian economy was carried out with Vetiva beginning with the appraisal of the real economy with the assessment of Nigeria’s growth trajectory, falling living standard levels, a recent policy framework to address poverty, and the outlook for the real economy. After articulating the drivers of growth in major sectors of the economy, Vetiva estimated that the Nigerian economy could grow by 3.1 per cent at the end of the year.
On inflation, Vetiva envisaged a tussle between FX pressures and high base effects in the second half of the year. While base effects are expected to influence a moderation in inflation, the economist noted an average inflation expectation of 17.34 per cent for 2021.
