Economic week ahead: Markets react as Nigeria forfeits SA

Africa's economic week began with news that Nigeria is now officially Africa's largest economy as well. (Reuters)

Africa's economic week began with news that Nigeria is now officially Africa's largest economy as well. (Reuters)

This week began with the news on Sunday that Nigeria has officially displaced South Africa as Africa's largest economy. As the week rolls on, the International Monetary Fund (IMF) will release its bi-annual World Economic Outlook – providing updated forecasts for all of the world's major economies – India will head to the polls and China will update on trade. Here is your complete guide. 

Africa's economic week began on Sunday with news that Nigeria – the continent's most populous nation and largest oil producer – is now officially Africa's largest economy, knocking South Africa from the top spot by a large margin. 

Nigeria's long-awaiting rebasing of gross domestic product (GDP) to 2010 resulted in a revised 2013 GDP figure of $510-billion.
By comparison, South Africa's GDP stood at $370-billion last year. 

Behind the headline figures, Nigeria's statistical exercise revealed that the country's economy is far more diversified than pre-rebasing figures suggested. Oil and gas – previously thought to account for nearly a third of Nigeria's overall economy – actually accounts for less than 15% of GDP. Agriculture's share of GDP, similarly, dropped from 37% to 22%. 

Most national statistics agencies rebase GDP at least every three or four years to ensure that it remains an accurate measure of the size of their country's economy. Nigerian officials had not done so in 24 years. 

Looking forward to the remainder of the week ahead, the South African Reserve Bank will release last month's reserves figures on Monday. On Tuesday, the South African Chamber of Commerce and Industry will release last month's business confidence index and, on Thursday, Statistics South Africa will release February's manufacturing production numbers. 

Elsewhere on the continent this week, Ghana will report GDP figures for the fourth quarter of 2013 on Wednesday and consumer inflation data on Thursday, as will Egypt. Closing out the week, officials in Botswana will announce their latest rates decision on Friday. 

United States
America's data diary is exceptionally light this week. First up, the National Federation of Independent Businesses's small business optimism index will be released on Tuesday. The index fell sharply in February – pulled down by both sales and economic expectations – but probably rebounded in March to a reading of 92.4.

Also on Tuesday, the labour department's "Job Openings and Labour Turnover Survey" report – said to be a favoured indicator of Federal Reserve chief Janet Yellen – is forecast to show that the number of job openings in America increased in February. 

On Wednesday, the Federal Reserve will release the minutes of its March meeting, at which policymakers dropped their link between a specific level of employment and interest rates. Instead, the Federal Open Market Committee said they will look at a wide range of information. Markets will be looking for clarity. 

On Thursday, the US government will release its monthly budget statement, import and export prices for March and weekly jobless claims figures. Economists expect export prices to have risen 0.3% last month. Import prices probably rose 0.2%. New filings for first time unemployment benefits likely fell to 318 000 in the week ended April 6 from 326 000 in the previous week.

Finally, on Friday, America's producer price index for final demand is expected to show that prices rose 0.1% in March after falling 0.1% in February. Excluding more volatile food and energy costs, prices probably rose 0.2%. 

Europe's week will begin with the Sentix research group's closely followed gauge of investor sentiment and Germany's February industrial production data on Monday. Sentix's index tracking morale in the eurozone unexpectedly rose to 13.3 in February – its highest level since April 2011 – and is widely thought to have climbed further in March. 

Attention will shift to the United Kingdom on Tuesday for the UK National Institute of Economic and Social Research's March GDP estimate and February's industrial production figures. Consensus is that industrial output rose 0.3% on a monthly basis and 2.2% from a year earlier in February, down slightly from January's 2.9% year-on-year rise. 

On Wednesday, Germany and the UK will each release trade updates. Markets expect Germany's trade surplus to have increased to €17.2-billion in February from €15-billion in January. The UK's trade deficit with the rest of the world likely shrank to £9.4-billion £9.8-billion over the same period. 

On Thursday, the Bank of England's monetary policy committee will announce its latest rates decision. Economists and investors widely expect Governor Mark Carney and his colleagues to keep the bank's benchmark rate on hold at 0.5%, a record low. Officials previously pledged to keep policy ultra-loose for as long as Britain's jobless rate – sitting at 7.2% according to the country's most recent data – remains above 7%. 

Finally, on Friday, German Chancellor Angela Merkel and Greek Prime Minister Antonis Samaras will meet in Athens for talks on the euro. Greece is seeking to return to financial markets after receiving bailouts from the European Union and other international donors. 

India's parliamentary elections will begin on Monday. Over the next five weeks, more than 800-million Indians are expected to cast their ballots in the biggest election the world has ever seen. Analysts widely expect voters to turn the ruling Congress Party – which has presided over the longest economic slowdown since the 1980s – out of power.

Results from the elections' nine-rounds of voting are expected on May 16. According to survey results released last week by Indian polling firm CSDS, the main opposition Bharatiya Janata Party – led by pro-business candidate Narendra Modi – is forecast to win the largest bloc of seats in India's Parliament, but fall short of an outright majority in the 543-member legislature. 

Later in the week, China – the world's number two economy – will release last month's trade data. The country's export volumes plummeted 18.1% from a year earlier in February – their biggest annual drop since 2009 – but probably bounced back in March. 

Consensus is that Thursday's figures will show that exports rose 4.4% from a year earlier and that imports climbed 4%, bringing China's trade account back to a slight surplus of $1.15-billion from last month's $22.99-billion deficit. 

Finally, on Friday, the Bank of Japan will release Japan's corporate goods price index for March. According to economists surveyed by Market News International, the index likely climbed 0.1% from February and 1.6% from a year earlier last month. If their forecast proves accurate, last month would mark the 12th consecutive year on year rise for Japan's main producer price gauge. 

Matt Quigley

Matt Quigley

Matt Quigley writes the weekly economic preview for the Mail & Guardian. His blog on the South African economy can be found at Read more from Matt Quigley

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