THE UNITY BANK DIGEST – AUGUST 17, 2022 (Re: Inflationary pressures shrinking consumer income)

Dear Subscriber,

Rising inflation has forced consumers to alter their consumption patterns as financial conditions tighten. Food inflation is making consumers switch from expensive commodities like bread to cheaper substitutes like yam and beans. As consumer demand falls, the sales and profits of businesses remain impaired, compounded by higher operating costs. Diesel prices have remained elevated, hovering around N770-N800 per liter.

Meanwhile, overall economic hardship continues to intensify as the country’s Misery Index climbed to 62.79% in July. Sadly, this pattern is anticipated to persist as interest rates climb along with inflation. However, it is expected that inflation may begin to taper in the coming months. This may give some respite to both consumers and businesses. Also, Unity Bank is intensifying its agric activities at the farm level and is expectant of a bountiful harvest and some price easing in Q4’22.

On the other hand, forex scarcity continues to exert downward pressure on the naira. The naira had peaked at N717/$ on July 29, due to panic buying and speculation. It appreciated to $682/$ on August 17, after the initial panic. However, instability in the forex market is expected to continue in the near term.

This edition of the Unity Bank Digest, as usual, provides you with intriguing recent economic news and interesting social stories.

Please enjoy your read!