Despite raising its Monetary Policy Rate (interest rate), Nigeria’s inflation rate is now 20 per cent above the World Bank’s projection of 15.5 per cent.
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 per cent.
The latest inflation figure from the National Bureau of Statistics, released on Friday, showed that the nation’s inflation rose to 18.60 per cent in June, the highest since January 2017 when it was 18.72 per cent.
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The NBS said, “In June 2022, the inflation rate increased to 18.60 per cent on a year-on-year basis. This is 0.84 per cent points higher compared to the rate recorded in June 2021, which is 17.75 per cent.
“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 per cent in June 2022, this is 0.03 per cent higher than the rate recorded in May 2022 (1.78 per cent).”
According to the statistics body, urban inflation rose to 19.09 per cent and rural inflation hit 18.13 per cent 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 per cent to 13 per cent 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.