Nigeria’s Inflation Expected to Drop to 26% Despite Recent Increases – IMF

Nigeria’s inflationary pressure is predicted by the International Monetary Fund (IMF) to drop to 26% this year.

During a press conference in Washington, DC, on Tuesday, the fund discussed the direction of Nigeria’s economic growth while releasing worldwide forecasts from its World Economic Outlook.

Nigerians continue to face significant challenges as a result of inflation, which also makes corporate activities in the nation more difficult.

The Central Bank of Nigeria (CBN) increased interest rates on February 27 by 400 basis points (bps), the highest increase in recent memory, to 22.75 percent in an effort to curb the inflationary surge.

The monetary policy rate (MPR) was increased by an extra 200 basis points to 24.75 percent by the regulator.

Nigerian inflation, meanwhile, has not stopped rising, with rises from 2022 to 2023 reaching 33.20 percent in March from 31.70 percent in February.

Daniel Leigh, division leader of the IMF’s research department, did, however, state at the press conference that Nigerian inflation will reduce in tandem with the predicted worldwide inflationary pressures, which are expected to drop from 2.8 percent at the end of 2024 to 2.4 percent at the end of 2025.

“Growth in Nigeria steady, but actually rising this year from 2.9 percent last year to 3.3 percent this year,” Leigh said.

“We’ve seen expansion from the recovery in the oil sector with a better security situation, and also improved agriculture, benefiting from the better weather conditions and the introduction of dry season farming.

“So, there’s a broad-based increase also in the financial sector in the IT sector. Inflation Yes, it has increased. Part of this reflects the reforms in the exchange rate. So this explains also why we revised our inflation projection for this year at 26%.

“But with the tight monetary policies and the significant interest rate increases during February and March, we see inflation declining to 23% next year and then 18% in 2026. So in the right direction. [CONTINUE READING HERE]