CBN expects Nigerian inflation to rise by 14.15% this year due to pandemic

Nigeria inflation is expected to rise up to 14.15% at the end of December, the central bank said, citing supply shocks due to fall in economic activity and disruptions caused by the novel coronavirus pandemic.

Inflation climbed to 12.82% in July, its eleventh month rise, to remain at its highest level in more than two years. Nigeria is due to release August inflation data on Tuesday. The central bank said in a report on Friday that low manufacturing capacity compared with rising demand for imported goods has affected the economy with a food supply shock.

“Headline inflation is expected to hover around 13.97% and 14.15% at end December 2020,” the central bank said.

Food inflation, a separate index which accounts for the bulk of the inflation basket, has been in double digits for more than three years.

Africa’s largest economy contracted 6.1% in the second quarter and now faces a possible recession in third quarter. The West African has been badly hit by the coronavirus outbreak. The government expects the economy to contract by as much as 8.9% this year.

The central bank said it wanted to curb inflation to a level that is conducive for growth through liquidity management. It has said it aimed to maintain inflation within a target band of 6% to 9%, which it is yet to achieve. Reuters

Pix: CBN Governor, Godwin Emefiele