The Nigerian inflation rate has increased by 20% since it raised its monetary policy rate (interest rate).
In its most recent report, ‘Nigeria Development Update (June 2022): The Persistence of Business Unusual,’ The global bank predicted that Nigeria’s inflation rate would be higher than expected, reaching 15.5 per cent.
The latest National Bureau of Statistics inflation figure, released on Friday, showed that the country’s inflation rose to 18.60% in June, the highest since January 2017, when it was 18.72%.
According to the NBS, the inflation rate increased to 18.60% year on year in June 2022. This is 0.84 percentage points higher than the previous year.
“This means that the headline inflation rate increased in the month of June 2022 when compared to the same month in the previous year (i.e., June 2021). Increases were recorded in all COICOP divisions that yielded the Headline index.
On a month-on-month basis, the headline inflation rate increased to 1.82 per cent in June 2022, this is 0.03 per cent higher than the rate recorded in May 2022 (1.78 per cent)”.
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According to the statistics office, urban inflation reached 19.09 per cent in June 2022, while rural inflation reached 18.13 per cent. This is despite the Central Bank of Nigeria’s recent interest rate hike.
In an effort to combat inflation, the CBN raised the nation’s interest rate from 11.5 per cent to 13% in May. Godwin Emefiele, Governor of the Central Bank of Nigeria, revealed that the Monetary Policy Committee had to raise the monetary policy rate by 150 basis points to prevent inflation.
“Six members voted to raise the MPR by 150 basis points, four by 100 basis points, and one by 50 basis points,” he said.
“Members expressed deep concern about the continued uptrend of inflationary pressure despite the gradual improvement in output growth.
The committee notes that the current rise in inflation is inimical to growth and the full recovery of the Nigerian economy”.
According to the World Bank, rising inflation will push millions of Nigerians into poverty in 2022.
