Economic analysts have predicted an upward swing in the hike of prices in Nigeria.
Despite the Central Bank of Nigeria’s (CBN’s) deployment of fiscal policy instruments of adjusting government spending levels and tax rates, inflation appears to be moving uphill.
Analysts are already projecting that Nigeria’s January inflation could move up to 8.2 per cent from 8 per cent in December 2014, as the recent devaluation of the naira, as well as, increasing food prices from the North-Eastern part of the country were telling badly on the economy.
Access Bank’s economic Intelligence Report released, on Wednesday, February 11, stated that higher consumer prices for January could have been pushed largely by higher food prices from the North-Eastern part of the country, due to rising input prices factor, and the continued unrest in the region.
According to the report, “the Central Bank’s tight monetary policy stance and impact of imported inflation arising from naira devaluation are contributory factors to this month’s inflation forecast. Particularly, we expect a 6.8% rise in core inflation, quicker than 6.2% seen in December.”
The report also hints that there could also be further pressure on the local currency as investors dump naira denominated investment as currency substitution.