Analysts Forecast Higher Inflation Rates
Economists and development analysts at the Centre for the Study of Economies in Africa (CSEA) have projected that the nation’s inflation rate may surge further in the months ahead as the various fiscal stimulus packages deployed to combat the pandemic boost the liquidity in the economy.
Specifically, the analysts predicted that the COVID-19 pandemic would likely further drive food inflation upwards as access to inputs and services is reduced, labour movement is curtailed and inter- and intra-state travel is minimized.
To mitigate the likely impact of increasing liquidity in the economy on the general price level in the months ahead, the CSEA experts said that in the coming months, the Monetary Policy Committee (MPC) may consider revising the Monetary Policy Rate (MPR) upwards from 13.5%.
The latest inflation rate published by the National Bureau of Statistics (NBS) for March reflected that the rate rose by 0.06 percentage points to 12.26%, the highest-level recorded since April 2018.
The Bureau attributed the rise in inflation to increase in all components, with core sub-index growing by 0.3 percentage points to 9.73% and the food sub-index by 0.08 percentage points to 14.98% between February and March.
The spike in inflation is despite the decline in money supply in the preceding month to N2,186,723 trillion (-2.7 percent) and the decline in petroleum prices during the month under review.