Nigeria’s inflation to average 19% in 2022, says IMF

The International Monetary Fund (IMF) is projecting that Nigeria’s inflation will moderate to an average of 19 per cent by the end of 2022 and further drop to 17 per cent by 2023 due to the tightening measures taken by the Central Bank of Nigeria (CBN).

The Monetary Policy Committee (MPC) recently raised benchmark interest rate from 14 per cent to 15.5 per cent and tightened liquidity by increasing Cash Reserve Requirement to 32.5 per cent.

Speaking at the 2022 IMF/World Bank Annual Meetings, Division Chief, Research Department, IMF, Daniel Leigh, said the monetary policies in the country would drive down the spiking inflation in the country which stood at 20.52 per cent as at August 2022.

He said, “For Nigeria, we forecast inflation at about 19 per cent this year, but then some moderation next year down to 17 per cent, and part of that does reflect the monetary policy actions which is the four per cent point increase in Nigeria’s Central Bank as well as the decline that we expect in oil and food prices globally.”

The IMF Director, Research Department, Pierre-Olivier Gourinchas, said, “Our advice in general is that central banks should first start with the traditional instruments of monetary policy and as you want to think about non-conventional instruments then you should think about what is the friction that is preventing the conventional monetary policy from working it will require a country or a central bank to deploy alternative ways of charting a course for monetary policy.”