Nigerians Expect Weaker Economy If Inflation Rises Faster — CBN
The Central Bank of Nigeria has said more than 60 per cent of Nigerian households it surveyed in September believed that the nation’s economy would end up weaker if inflation started to rise faster.
The CBN, in Inflation Attitudes Survey Report for the third quarter of 2020, said respondents were asked what would become of the Nigerian economy if prices started to rise faster.
It said, “The survey result showed that 62.1 per cent of the respondents believed that the economy would end up weaker; 9.0 per cent stated that it would be stronger; 12.6 per cent of the respondents believed it would make a little difference, while 16.4 per cent did not know.
“The responses showed considerable support for price stability, as majority (62.1 per cent) agreed that the economy will end up weaker. This is consistent with the notion that inflation constrains economic growth.”
The apex bank said when asked how prices had changed over the past 12 months, respondents gave a median answer of 5.3 per cent.
“Of the total respondents, 3.5 per cent thought prices had gone down or not changed, 73.7 per cent felt that prices had risen by at least 3.0 per cent, while 21.5 per cent felt that prices inched up by more than 1.0 per cent, but less than 3.0 per cent. Those that had no idea were 1.4 per cent,” it said.
The report said the percentage of respondent households who felt that interest rates had risen in the last 12 months increased by 10 points to 35.3 points in Q3 from 25.3 points in Q2, 2020.
“On the other hand, 8.3 per cent of respondents believed that interest rates had fallen, while 43.4 per cent of the households had no idea,” it said.
The central bank said respondents were asked how satisfied they were with its management of interest rates in the country.
It said, “The net satisfaction index, which is the proportion satisfied less the proportion dissatisfied, stood at -12.7 per cent. This indicates net dissatisfaction with CBN’s management of interest rates.
“Among the respondents, 2.8 per cent were ‘very satisfied’, while 17.0 per cent were ‘fairly satisfied’. 15.4 per cent were ‘fairly dissatisfied’. However, 20.0 per cent were ‘neither satisfied nor dissatisfied’ whereas 17.1 per cent were ‘very dissatisfied’.”