The United Kingdom (UK) economy has officially entered a recession for the first time in 11 years with financial experts saying the recession will certainly have negative impacts on bilateral trade between Nigeria and the United Kingdom.
Financial Analyst with FXTM based in the UK, Lukman Otunuga said: “A possible spillover effect on Nigeria amid a reduction in trade and investment could enforce further pressure on the country which is already entangled in a fierce battle against COVID-19.”
The UK economic growth during the second quarter was abysmal, plunging 20.4% after a 2.2% fall in the first three months of 2020. This was the largest recession on record and worst GDP seen in Western Europe.
Data released earlier in the week revealed an estimated one million jobs had already been erased during the coronavirus induced lockdown.
Otunuga said: “As we move deeper into the third quarter of 2020, the outlook for Nigeria will remain influenced by not only the coronavirus developments but Oil prices and implementation of the revised 2020 budget of N10.81 trillion.
“Given how the economic calendar for Nigeria is void of Tier 1 economic releases this week, expect the Naira to be impacted by Dollar shortages and local stocks to remain influenced by domestic risks.”