Analysts Predict Nigeria’s Inflationary Pressures Will Continue Q4, Rise To 20.9%, Sept

They also said that the increases will reflect in both the annual food (23.9%) and core (17.78%) sub-indices.

This is even as the International Monetary Fund, (IMF) chief Kristalina Georgieva said Thursday that central banks must “stay the course” in their battle against rising inflation, even amid the growing risks of recession worldwide.

Inflation remains “still stubborn, still persistent,” Georgieva told AFP in an interview.

“The risk of doing not enough is bigger than the risk of doing too much.“

The analysts were unanimous in their submissions that weaker domestic currency, higher logistics costs and excess liquidity  are the causes of the growing trends that have continued to make life and living difficult for most Nigerians.

Friday Ameh, Lagos based energy analyst believes that there is no way inflationary pressures will reduce when most farmers are off their farmlands due to insurgency.

Besides, Ameh said recent happenings like flooding has increased the level of hardships by consumers.

Bismarck Rewane, chief executive of the Financial Derivatives Company, (FDC) in the current Economic Bulletin for October 5, 2022 said.

“Based on a survey of major markets in the Lagos Metropolis and our time series model, we are projecting another increase in headline inflation to 20.9%.

It is worth noting that the pace of price increase is slowing. This might suggest that the price inflation may be approaching a point of inflection.

Our study also indicates that there will be an increase in both the annual food (23.9%) and core (17.78%) sub-indices.

The major causative factors propping up the price level, remain the “usual suspects” i.e., a weaker domestic currency (N732/$), higher logistics costs and excess liquidity.“

On Inflation expectations for this quarter, the economist added,

“Nigerian inflation is driven more by the transmission effect of forex scarcity on prices and high cost of energy.

In the last month, the naira has depreciated by 3.97% in the parallel market.

It traded at N704/$ at the beginning of September to N732/$ this week.

However, due to a possible long outside lag (the amount of time it takes for government’s policy to have a noticeable effect on the economy) the impact of the current MPC policy rates hike might not have an immediate effect.

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This suggests that inflationary pressures loom, and would still continue in the next quarter, especially with the elevated price of diesel and other sources of energy.

However, we expect the monetary policy committee to maintain status quo in its next meeting.“