Nigeria’s inflation rate may rise to 30 per cent by December 2023, according to Stears, a data-driven insights provider.
This was predicted during the unveiling of its Pan-African inflation forecasts, projecting that Nigeria’s annual inflation rate is set to climb steadily until year-end at 30 per cent, a level not attained since the fourth republic.
The firm in a statement said its forecasts are based on trusted econometric tools that consider a myriad of factors driving inflation, from general to country-specific dynamics.
Stears’ Head of Insights, Fadekemi Abiru, said, “In September, we saw the exchange rate premium—the differential between official and parallel rates—rise to 25.2 per cent, which is a significant increase from what it was in August.
“We expect this gap to keep widening and exerting further inflationary pressures unless we see significant dollar inflows into the economy. We have also had heavy and prolonged rainy season, which has affected harvests. Following the recent release of Nigeria’s September 2023 inflation data, the country’s forecasts have been prioritised, with Kenya’s projections scheduled for early November and forecasts for other African nations coming in early 2024.”
Stears further said its forecasts aim to guide corporates, professionals, and policymakers in their short-to-medium term pricing, investment, and policy decisions.
Furthermore, its inflation forecasts, spanning from October 2023 to December 2024, include both average and year-end predictions for 2023 and 2024.
Nigeria has one of the highest inflation rates in the world and an estimated four million people were pushed into poverty between January and May 2023 because of the worsening cost of living.
According to the World Bank, the removal of fuel subsidy and devaluation and unification of the exchange rate system will continue to increase the inflationary pressure in the country in the near term and erode the purchasing power of the average Nigerian in 2023.
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