Inflation rate, the average rate of change in the prices of goods and services is expected to attain a new high in December, 2023, amidst expectations that it would resume a descent in 2024, Chief Executive Officer (CEO) of Financial Derivatives Company (FDC) Limited, Bismarck Rewane, has said.
The National Bureau of Statistics (NBS) is billed to release its December 2023 inflation report on January 15.
“Based on our analysis, which is a combination of our market survey and a time series model, Nigeria’s headline inflation is projected to climb by 0.5 per cent to 28.7 per cent. Our projection will probably be accurate within a margin of error ranging from -0.5 per cent to +0.5 per cent, meaning that inflation in Nigeria will be at a record high”, said Rewane in the FDC Economic Splash current edition.
He however expressed worry that with global and regional inflation slowing now, Nigeria is fast becoming an outlier, which has become a cause for concern.
Analysts question the credibility of Nigerian data and the disparity between its rising inflation and the global downtrend.
“This discrepancy is attributed to imported inflation, driven by nominal global commodity prices and a 38.84% depreciation of the naira in 2023. Bloomberg has ranked Nigeria’s currency as the third worst-performing currency among the 154 currencies it tracks globally”, said the FDC Economic Splash.
Inflation is estimated to decline in 2024
“Inflation expectations are more important than historical inflation. Eventhough inflation in Nigeria increased consistently in 2023, many experts are projecting a significant decline in 2024”, he said.
According to EIU, inflation in Nigeria is expected to fall to 23.6 per cent in 2024 and 17 per cent in 2025. These projections are not unrealistic, as Nigeria is likely to see a moderation in inflationary pressures in the second half of 2024.
