Effect of current increase in Nigeria’s inflation rate
Nigeria’s inflation rate jumped to 11.44% in December 2018 from 11.28% recorded in November 2018, the National Bureau of Statistics (NBS) has said.
The Bureau, in its “CPI and Inflation Report’’ for December 2018 released in Abuja on Wednesday, January 16, 2018, stated that the figure was 0.16% points higher than the rate recorded in November same year.
The rise is the highest inflation figure since June 2018.
According to the report, increases were recorded in all Classification of Individual Consumption by Purpose divisions that yielded the Headline index.
NBS says the headline index increased by 0.74% in the period under review by 0.06% points from the rate recorded in Nov. 2018 (0.80%) on a month-on-month basis.
Urban and rural inflation rates jump
NBS report states that urban inflation rate increased to 11.73% (year-on-year) in December 2018 from 11.61% recorded in November of the same year.
Also, rural inflation rate increased to 11.18% in December 2018 from 10.99% in November 2018.
“On a month-on-month basis, the urban index rose by 0.76% in the period under review, showing a decline of 0.07% from 0.83% recorded in November 2018.”
NBS said the rural index also rose by 0.72% in December 2018, indicating a decrease of 0.06% from the rate of 0.78% recorded in November 2018.
The NBS report is coming less than a week to the first Central Bank of Nigeria Monetary Policy Committee (MPC) meeting.
The apex bank will meet between January 21 and 22, 2019 in Abuja to make decisions on key lending rates.
How it may affect citizens
The Central bank of Nigeria may increase interest rates to moderate the inflation rate in the short run.
Fixed income earners find it difficult to get more items – reduce purchasing power. Take home pay may not get home.
Consumers with a loan facility may find it difficult to pay and hence, may lead to bad debt for commercial banks.
It will affect a country’s exchange rate – Nigeria naira may depreciate further against other currencies – exchanging at a high rate per a dollar.
It poses great uncertainty for the Nigerian market.