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From Uche Usim, Washington DC
Despite Nigeria’s food inflation swelling to 40 per cent in March, the International Monetary Fund (IMF) has predicted that Nigeria’s inflationary pressure will ease to 26 percent this year.
The Fund made the prediction while analyzing Nigeria’s economic growth trajectory at the formal presentation of its World Economic Outlook at a news conference in Washington DC on Tuesday.
Nigerian economic experts have repeatedly described Inflation as a major stumbling block to prosperity as businesses find it hard to survive in an atmosphere of intense inflationary pressure.
To slay the beast, the Central Bank of Nigeria (CBN) hlraised the interest rate by 400 basis points (bps) to 22.75 percent on February 27, the highest in recent years.
The regulator further hiked the monetary policy rate (MPR) by an additional 200 basis to 24.75 per, cent but it has defied the interventions.
Speaking at the media briefing, Daniel Leigh, division chief of the research department at IMF, said inflation would drop in Nigeria alongside global inflationary pressures estimated to decline from 2.8 percent at the end of 2024 to 2.4 percent at the end of 2025.
Leigh said: “Growth in Nigeria steady, but actually rising this year from 2.9 percent last year to 3.3 percent this year.
“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.”
