Nigeria's inflation crosses 28%, reaching new 18-year high
Nigeria's inflation rate reached a new 18-year high in November, matching a record level from 2005, potentially prompting the central bank to consider raising interest rates. Consumer prices surged by 28.2% compared to the same period a year earlier, up from 27.3% in October, according to National Bureau of Statistics data. The
Bloomberg survey of economists had a median estimate of a 27.9% increase. Prices rose by 2.1% within the month. Compared to November 2022, the year-on-year headline inflation rate saw a substantial increase of 6.73 percentage points, rising from 21.47% the same month the previous year.
On a month-on-month basis, the inflation rate for November 2023 was 2.09%, indicating a 0.35% increase from the October 2023 rate of 1.73%. This implies that the rate of average price level increase in November 2023 exceeded that observed in October 2023. The elevated inflation figures suggest potential challenges for Nigeria's central bank in managing monetary policy to address rising price levels.
Key Takeaways
Food prices remain a significant cost burden for many Nigerians, with staples such as bread and yam experiencing price increases. The food inflation rate for November was reported at 32.84%. Julie Kozack, the Director of the Communications Department of the International Monetary Fund (IMF), has urged the leadership of the Central Bank to consider further interest rate hikes at the next rate meeting. Despite the IMF's recommendation, there has been a lack of communication from the Central Bank Governor on rate hike meetings, causing skepticism among analysts about the effectiveness of measures to curb inflation. However, in a recent meeting with the Joint Committee on Banking, Insurance, and Other Financial Institutions, CBN Governor Olayemi Cardoso assured that inflation would decline in 2024. The ongoing focus on managing inflation and the divergent views of various stakeholders contribute to the complexity of Nigeria's economic situation.
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