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IMF predicts Nigeria’s inflation rate to drop to 23%

Published

11 months ago

February 1, 2024

Nigeria’s inflation rate is expected to drop to 23% in 2024, and 15.5% in 2025 according to the International Monetary Fund (IMF).

This was revealed by Daniel Leigh, head of the World Economic Studies division in the IMF’s Research Department which produces the World Economic Outlook (WEO), during Tuesday’s WEO update press conference. As of December 2023, Nigeria’s inflation rate was 28.92 percent and had been rising for 11 months.

Leigh stated that the apex bank’s monetary tightening posture would contribute in lowering the inflation rate in response to the foreign exchange measures implemented by the Central Bank of Nigeria (CBN) to control inflation and the free fall of the naira.

Leigh stated that the weak naira as a result of the banking regulator’s reforms is one of the factors contributing to inflation. He said: “Now there’s also structural factors behind that high inflation, including, you know, on the fiscal side, financing of the deficit. But this is clearly creating hardship. The perspective that we have is bringing down inflation is top priority.

“And the CBN has already raised interest rates significantly over the past year to 18.8 percent. So that is the monetary tightening that is helping in our forecast to bring inflation down from 24.6 percent in 2023 percent, to 23 percent this year, and then closer to single digits into 2025 at 15.5 percent.”

Leigh contends that Nigeria should emphasise revenue mobilisation and expand its tax base in order to finance social services, even as it continues to tighten its monetary policy in an effort to combat inflation.

“On top of conquering inflation through monetary tightening, there’s also a need to provide social support through the budget and creating the space for that is the challenge.

“Our perspective is that more revenue mobilisation, strengthening revenue administration, widening the tax base, are what are going to bring in space for development spending while safeguarding fiscal sustainability,” Leigh added.

Related Topics:Featured IMF Inflation rate Nigeria

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Moroccan annual inflation rises to 0.8% in November

Published

2 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

3 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”