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Nigeria’s inflation overshoots World Bank projection by 20%
DESPITE raising its Monetary Policy Rate (interest rate), Nigeria’s inflation rate is now 20 percent above the World Bank’s projection of 15.5 percent.
In its recent ‘Nigeria Development Update (June 2022): The Continuing Urgency of Business Unusual,’ the global bank projected that Nigeria’s inflation rate was going to be higher than it had anticipated and would hit 15.5 percent.
The latest inflation figure from the National Bureau of Statistics, released on Friday, showed that the nation’s inflation rose to 18.60 percent in June, the highest since January 2017 when it was 18.72 percent.
The NBS said, “In June 2022, the inflation rate increased to 18.60 percent on a year-on-year basis. This is 0.84 percent points higher compared to the rate recorded in June 2021, which is 17.75 percent.
“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 percent in June 2022, this is 0.03 percent higher than the rate recorded in May 2022 (1.78 percent).”
According to the statistics body, urban inflation rose to 19.09 percent and rural inflation hit 18.13 percent in June 2022. This is despite the recent interest rate increase by the Central Bank of Nigeria.
In May, the CBN raised the nation’s interest rate from 11.5 percent to 13 percent in a bid to address inflation in the nation. The CBN Governor, Godwin Emefiele, disclosed that the Monetary Policy Committee had to increase the monetary policy rate by 150 basis points to prevent inflation.
He said, “Six members voted to raise the MPR by 150 basis points, four members’ by 100 basis points and one member, by 50 basis points.
“Members expressed deep concern about the continued uptrend of inflationary pressure in spite of the gradual improvement in output growth.
“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.