What is the inflation rate in Nigeria? Is it growing? What to expect in the future? Read our article to be aware of the latest news!
It is useful to understand what is going on in the world and especially in your country. Such measurement as inflation rate can give us the broad understanding of the economic situation.
What is inflation rate in simple words?
Let’s talk economics a little bit. In sum, the inflation rate is a measurement of the rise in the price of a good or service over a period of time. It depends on two major factors. The first one is demand. If demand is growing faster than supply, prices will increase. The second factor is companies’ costs such as taxes or import. When companies' costs go up, they need to increase prices to maintain their profit.
What is current situation in Nigeria?
According to the National Bureau of Statistics, Nigeria would record double-digit inflation rate of about 10.16 percent in the end of 2016, up from 9.55 percent recorded in 2015.
If we will consider in a long-run, the inflation rate in Nigeria averaged 9.45 percent from 2007 until 2016, reaching an all-time high of 19.28 percent in January of 2007 and a record low of 0.49 percent in March of 2008. So as we can see from the graph below, the inflation rate has grown a lot during recent years.
Forecast of inflation in Nigeria
Looking forward, the inflation rate in Nigeria can be estimated to stand at 15.50 in 12 month’s time. In the long-term, the Nigeria Inflation Rate is projected to trend around 10.80 percent in 2020.
Is inflation so bad?
People like to complain about prices going up, but they often ignore the fact that wages should be rising as well. The question shouldn't be whether inflation is rising, but whether it's increasing at a quicker pace than your wages.
Finally, inflation is a sign that an economy is growing. Between 2017 to 2019, Nigeria’s economy will grow yearly by an average of 5.41 percent as the country begins to reap the benefits of the extra N1.6 trillion budgeted for capital expenditures in the 2016 budget. In particular, the government’s plans to add 2,000 MW to the country's stock of power generation within the next 12 to 15 months will have multiple effects on both the manufacturing and services sectors.
So don’t despair if you suffer some difficulties now because of high inflation rate. The economy is growing and everything will be all right soon!
Watch the video to find out the latest news about Nigeria inflation rate and get the understanding of economic situation overall.
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