Yemi Kale, partner and Chief Economist, KPMG in Nigeria has said that inflation in the country is rising as a result of structural, cost-push and not necessarily a result of the money supply.
Kale disclosed in his keynote address, Thursday at the CEO forum organised by BusinessDay.
Nigeria’s annual inflation rate rose to 22.22 per cent in April from 22.04 per cent in the previous month, the National Bureau of Statistics (NBS) said Monday.
The statistics office said the April 2023 inflation rate increased by 0.18 per cent compared to the March 2023 headline inflation rate.
Kale highlighted that in the first half of 2023, following the redesign of the naira, the economy has been growing, however, the growth was between 2.8 percent to 3 percent which depends on how quickly the Dangote refinery starts.
“Our external reserve will continue to be under pressure and the inflows won’t come in for now because there are some steps that the CBN should use which they have not yet done. ,” he said.
Further, Kale said there is a possibility that we might go back to a negative trade account balance because we have removed the subsidy of PMS and we are importing PMS at a higher value.
Kale also noted that the global inflation rate has started to trend downward. “There is a probability of another global recession but I am seeing that the country is about to come back to normal,” he said. “We’re the only country that’s slowed our inflation rate by increasing money supply. Since 2022, growth in money supply has been similar to growth in GDP.”
