Nigeria’s headline inflation surprisingly jumped to a level much higher than trend and anticipation. At 13.22%, price inflation is now at a 29-month high, with a change of 0.4%. It is also the 12th consecutive monthly increase. All the measures of inflation (core, food and non-food) all spiked. Coinciding with the sharp contraction in real GDP (-6.1%), Nigeria now faces the reality of stagflation.
The CBN has consistently claimed that inflation above 12% is growth retarding. It will be forced to make hard choices on how to rein in money supply and push up the artificially low interest rates to keep inflation in check.
In this publication, the FDC Think Tank shares its thoughts on the impact of August’s inflation numbers on the economy and MPC’s decision.
Do enjoy your read…