Fidelity bank banner UBA banner
Experts say CBN’s 2018 single-digit inflation rate target not feasible

By News Express on 17/04/2018

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 712


 

Two financial experts on Monday said that the 2018 single-digit inflation target of the Central Bank of Nigeria (CBN) would not be feasible, due to the downside risks occasioned by electioneering spending.

 The experts expressed the viewpoint in separate interviews with the News Agency of Nigeria (NAN) in Lagos while reacting to the March inflation figure released by the National Bureau of Statistics (NBS).

Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said that the apex bank’s single-digit inflation projection appeared impossible in a pre-election year.

Uwaleke said that the target would not be achievable following downside risks such as election spending and implementation of minimum wage.

He said that inflationary pressure would likely resume in the third quarter on the back of waning base effect and electioneering spending.

According to him, another downside risk down the road is the implementation of the minimum wage by the government, expected to kickoff in the third quarter of the year.

Uwaleke said that the drop in the March inflation rate to 13.34 per cent, from 14.33 per cent in February, was in line with expectations.

He said that the current disinflation trajectory was expected to continue until the end of the second quarter, due to stable exchange rate and base effect.

NAN reports that base effect relates to inflation in the corresponding period of the previous year; if the inflation rate was too low in the corresponding period of the previous year, even a smaller rise in the Price Index will arithmetically give a high rate of inflation now.

On the other hand, if the price index had risen at a high rate in the corresponding period of the previous year, and recorded high inflation rate, a similar absolute increase in the Price index now will show a lower inflation rate now.

“The year on year reduction in inflation rate since February 2017 has been partly due to the base effect. That is, the fact that CPI has been computed based on previously high inflation figures,” Uwaleke said.

Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun, said that the inflation pressure would heighten in the next few months with election campaigns.

Tella said that the apex bank should be at alert and formulate policies that would reduce inflationary pressure during the period.

He, however, attributed the slowdown in the inflation rate to stability in the exchange rate and low demand in the economy, due to the credit crunch by the CBN.

NAN reports that Mr Godwin Emefiele, CBN Governor, in October 2017, said that inflation rates were projected to drop and record high single-digit rates mid-2018.

Emefiele stated this while speaking with journalists at an investment conference at the London Stock Exchange.

“We are very optimistic that food prices will come down; and as they come down, it will help to complement the reduction in core inflation.

“We are hoping that by the middle of next year, we should begin to approach the high single-digits,” he said. (Nigerian Tribune)

Source News Express

Posted 17/04/2018 12:36:35 AM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

 

You may also like...
Rivers PDP calls on APC’s Chidi Lloyd to...

2019 Election: PDP panicking over imminent defeat in...

Nigeria to spend N270b to repair bridges

APGA cautions Obiano, Okorocha; seeks unity among South...

Buhari expresses confidence in oil sector reform

Catholic Bishop in India arrested after being accused...

Akpabio, Uduaghan, others bag awards

Online buildings tracking begins in Abuja

Sokoto deploys 175 doctors, nurses, midwives to PHCs...

Obasanjo to politicians: Use only your children as...

FG collaborating with killers of Benue people —...

US supports IDPs in Adamawa with $801,000

 

Latest News 2023: No Igbo presidency, no Nigeria — South East activists Labour unfolds plans to disgrace debtor-governors Tension in South East as Police, IPOB engage in show of force Bandits kill 22 in fresh Zamfara attack Rivers Tragedy: Father kills four children, sets home ablaze, hangs self Ndigbo must return home during elections — MASSOB Nigerians open one million bank accounts monthly: NIBSS Déjà vu: I fear it will be unto Buhari as it was unto Jonathan in 2015, By Fredrick Nwabufo Heirs Holdings signs $600m facility deal with Afrexim Bank, poised to scale up energy investments Delta First Lady calls for lasting solution to challenges facing education sector Why Atiku was absent at signing of Peace Accord — PDP Disquiet in Zaria as DISCO disconnects city

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (429,796 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (394,739 views) Shameless Genevieve Nnaji exposes breasts in public (327,638 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (280,962 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (247,785 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (229,229 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (212,055 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (193,268 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (179,539 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (170,402 views) Lagos plane crash: Journalist releases victims’ names (167,196 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (153,667 views)

 

Zenith Zero Balance First Bank chat banking

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (76) Business & Economy (3,874) Business Verdict (54) Columnists (972) Complaints & Requests (95) Enterprise & Opportunities (208) Entertainment (575) Features (679) Global Business Monitor (312) International (2,810) Interview (167) Live Commentary (28) Love Matters (146) Maggie's Blog (69) News (41,366) Opinion (1,150) Pidgin (13) Politics (8,132) Religion (911) Sports (1,817) Stock Watch (35) AMA & Al Jazeera Global Update

 

 

 

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera