Rising Inflation May Weaken Nigeria’s Economy-CBN

Nigeria’s rising inflation may further weaken the economy of Africa’s largest oil exporter, report from the Central Bank of Nigeria, said.

The apex bank revealed this in its ‘Inflation Attitude Survey Report for the second quarter seen by THE WHISTLER.

Nigeria has seen a rise in its inflation rate from 12.40 per cent to 12.56 by the end the second quarter of 2020.

Driven by the impact of the Covid-19, the country’s inflation rate peaked 29-month high at 13.22 per cent by the end of September 2020.

The apex bank report which sampled 2,070 households showed that 57 per cent of Nigerians, “believe that the economy would end up weaker if prices start to rise faster than they do now.”

It said that the responses showed considerable support for price stability.

The CBN report noted that the reaction was consistent with the notion that inflation constrains economic growth.

The report further indicated that most Nigerians expects prices of goods to rise by three per cent up to June 2021.

The Central Bank report pointed out that given a trade-off between inflation and interest rates, most Nigerians prefer interest rates to fall than inflation rate.

The response is, “suggestive of the respondent households’ support for the Bank’s price stability objective, ” the lender added in the report.

The CBN, however, admitted that Nigerians were dissatisfied with its managed of the country’s interest rate, as the net satisfaction index fell to nine per cent.