The amount of money in circulation is still at an all-time high, and the entrance of old money into circulation is likely to make matters worse.
Various investment kinds may be affected by rapidly growing inflation. Bonds and other fixed-income assets may see lower actual returns as inflation rises faster than interest rates. Similar to how cash holdings lose value in real terms, people look for other investment opportunities to protect their money and act as an inflation hedge.
Uncertainty in the economy may result from a sharp rise in inflation. Businesses may find it difficult to forecast and plan for future expenses, which makes it difficult to successfully establish prices or budgets. Similar to how the fast-shifting inflation environment makes people’s financial calculations unpredictable, people may find it challenging to set their financial goals and make long-term decisions.
BRIU anticipate the central bank to increase MPR later and may also take additional measures to reduce inflation.
The projection by Statista predicts inflation would drop to near 14% by 2028
Other metrics include;
In April 2023, Nigerian inflation reached 22.2%, the highest since January 2004. Core inflation reached 20%, indicating broad-based price rises in housing, education, and healthcare. The new inflation data’s five components could harm Nigerians’ purchasing power.
Five troubling indications in the latest inflation report imply Nigeria’s inflation rate could stay high for a long time
Nigeria’s April 2023 inflation data show worrying tendencies for citizens’ purchasing power. April 2023 had Nigeria’s highest inflation rate since January 2004, 22.2%. Since July 2022, Nigeria has had record monthly inflation. Every month, inflation hits new highs.
Gas, air transport, liquid fuel, vehicle replacement parts, fuels and lubricants for personal transport equipment, medical services and road transport rose the most. Food and non-alcoholic drinks (11.51%), housing water, electricity, gas, and other fuel (3.72%), clothing and footwear (1.7%), and transport (1.45%) contributed to the headline index increase.
Five troubling indications in the latest inflation report imply Nigeria’s inflation rate could stay high for a long time. Even though the inflation rate may grow, economists use other consumer price index indicators to predict whether it will reduce overall. The latest report indicates things may be getting worse. Indicators include these.
Monthly Inflation Hits 2016 Highest. April saw the highest month-on-month inflation since 2016. May’s inflation rate was 1.9%, the highest since 2016. The fastest monthly inflation rate suggests a rapid price increase. This strains households, making it harder to afford staples. As living costs grow, families may struggle to satisfy their fundamental necessities, compromising their quality of life and well-being. 17-Year High Year-on-Year Inflation. The April 2023 year-on-year inflation rate was the highest in 17 years, showing a sustained price increase.
Inflationary pressure hinders household financial stability and future planning. Nigerian families risk lower savings, spending, and economic growth. Commercial banks may raise interest rates to match inflation. To survive, most enterprises hike prices. Inflation Exceeds 20%.
Core inflation reached 20% in April, a gloomy milestone for price-sensitive small firms. Core inflation includes household budget staples including housing, education, and healthcare. This disturbing development shows that price hikes are widespread across the economy. Nigerian families would lose purchasing power as core inflation rises, worsening financial problems. Food inflation is unparalleled. April’s record food inflation was troubling.
Rising food prices hurt households, especially the poor. As food prices rise, eating healthy becomes harder. Food insecurity, malnutrition, and a reduction in Nigerian family health and well-being increase with food inflation. Food and non-alcoholic beverage prices rising. Food and non-alcoholic beverage prices grew 24.5% during food inflation.
This indicator shows how staple food prices are rising. As grain, meat, vegetable, and other basic prices rise, families face the agony of compromised meals and nutritional inadequacies. As households spend more on food, making ends meet becomes harder.