This paper considers the analyses and forecasting of the monthly allitems yearonyear change inflation rates in nigeria. The gross domestic product growth is a long term rise in the capacity to supply increasingly diverse economic goods o its population. The paperestimates the impact of interest rate on inflation in nigeria. Ajisafes study was preoccupied with the monetary factors that could cause inflation, at the expense of fiscal factors. Analysis of inflation and its determinants in nigeria. Anono abdulrahman zubairu lecturer department of management technology. Inflation of this rate is a warning signal for the government to control it before it turns into running inflation. The relationship between inflation and unemployment in. Our emphasis here is on diagnosis of the causes of inflation and a description of the effects of inflation, not on specific policy recommendations to end inflation. A proper understanding of these concepts is therefore very necessary in order to get a good grasp of how inflation and interest rate has effected growth in nigeria over the past eleven years. Though nigeria inflation rate fluctuated substantially in recent years, it tended to decrease through 1969 2018 period ending at 12. Learn more about the nigeria economy, including the population of nigeria, gdp, facts, trade, business, inflation and other data and analysis on its economy from the index of economic freedom. The study examines money supply and inflation rate in nigeria.
The money supply growth at the same period averaged 14. Nigerias inflation has been higher than the average for african and subsaharan countries for years now, and even exceeded 16 percent in 2017 and a real, significant decrease is nowhere in. The top part of the figure shows the inflation rate. The effect of inflation and interest rate on economic.
Inflation has been plaguing the nigeria economy for decades. Pdf modelling the inflation process in nigeria olusanya. The annual inflation rate in nigeria rose for the sixth straight month to 12. Inflation, interest rates and economic growth in nigeria. The country experiences on inflation is no longer the problem but the fact that inflation problem seems to have reached the crisis dimension. To the extent that inflation is not factored into nominal. Cause effect solution of inflation in nigeria myschooltrick. Nigeria s macro indicators, foreign exchange details, inflation rate, cbns latest news, documents and publications can be found here. Inflation rate trend in the nigerian economy 1973 20. Niger inflation rate 20032020 data 20212022 forecast. The relationship between inflation and unemployment in nigeria.
He reported that money supply, real gross domestic product, previous level of inflation and exchange rate cause inflation in nigeria. This pdf is a selection from an outofprint volume from the national bureau of economic research volume title. The trends of inflation rate in nigeria indicate that the country has experienced episodes of low, moderate and high inflation. Determinants of inflation in nigeria international journal of. The relationship between interest rate and inflation rate. This figure was close to the prediction of the fsdh which was an expected drop of 14. As part of the attempt to fill this lacuna, this study examines the quantitative effects of exchange rate depreciation on budget deficit and inflation in nigeria. The stationary properties of the model were also explored. This is the lowest inflation rate since april 2016. Inflation increases marginally, driven mainly by base effects nigeria economic outlook top 10 themes for 2019 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2015 2016 2017 2018e 2019f inflation rate yearly average headline inflation accelerates from 2018 estimate of 11. This page provides the latest reported value for niger inflation rate plus previous releases, historical high and low, shortterm. Nigeria s inflation has been higher than the average for african and subsaharan countries for years now, and even exceeded 16 percent in 2017 and a real, significant decrease is nowhere in. Here, you can also find the inflation definition and the information about the current inflation rate in nigeria. Click download or read online button to get determinants of inflation exchange rate and output in nigeria book now.
The study made use of secondary data sourced from the central bank of nigeria cbn statistical bulletin and the national. Statement of problem the effect of inflation and interest rate on economy growth in nigeria is quite a serious problem. Nigerias inflation rate fell for a fourth straight month in may, dropping to the lowest in a year as growth in prices of most goods except food eased. If we need to define inflation, we can simply describe it. Find out about the main causes of inflation in nigeria in this article.
This page provides nigeria inflation rate actual values, historical data, forecast, chart, statistics, economic calendar and news. Walking inflation occurs when prices rise moderately and annual inflation rate is a single digit. The effect of inflation and interest rate on economy growth in nigeria is quite a serious problem. Pdf determinants of behavior of inflation rate in nigeria. This page provides nigeria inflation rate actual values, historical data, forecast. This study is motivated by the conviction that inflation entails sizeable economic and social costs, and controlling it is one of the prerequisites for achieving a sustainable economic growth. Nigeria inflation end of period inflation rises for sixth month running in february. Individuals in this model, substitute current consumption for future consumption by either. The heightened volatility of interest rates and underlying expectations of money and price change. After that, estimates predict a 3 percent equilibrium for now however, given. Nigerias inflation rate falls to lowest in a year in may.
This study is a contribution to the existing literature on real growth applied tonigeria s economy. Pdf nigeria inflation rates december 2017 may 2018. Effect of inflation on the growth and development of the nigerian economy an empirical analysis aminu umaru lecturer department of economics school of management and information technology modibbo adama university of technology yola,adamawa state, nigeria. Nigeria economy gdp, inflation, cpi and interest rate. It is an issue taken up in a large number of recent studies in the developed nations. Nigeria inflation rate 19962020 data 20212022 forecast. During the observation period from 1979 to 2019, the average inflation rate was 19. According to news sources, nigerian inflation as at may 2015 is. Changes in interest rate determines the rate of inflation.
The results revealed that money supply and exchange rate were stationary at the level while oil revenue and interest rate were. Nov 20, 2019 nigerias inflation has been higher than the average for african and subsaharan countries for years now, and even exceeded 16 percent in 2017 and a real, significant decrease is nowhere in. Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at. However, since the series are integrated of order one as per the result of unit root. The inflation rate in niger was recorded at 0 percent in january of 2020. Until time t0, the inflation rate is constant at tt0. Though inflation rate is not new in the nigerian economic history, the recent rates of inflation have been a cause of great concern to many.
The interest rate has doubled through the period of 1997 and 2007 attaining a peak of 24. The impact of monetary policy rate on inflation in nigeria. Inflation, economic growth and interest rate concepts that are central and interrelated in macro economic. Ojo 2000 and melberg 1992 the term inflation describes a general and persistent increase in the prices of goods and services in an economy. The indirect monetary instruments aimed at the economic growth of nigeria. And it has continued on a downward spiral till date. Inflation and reflect a dozen diverse views on one of the nations central economic problems. Three major episodes of high inflation exceeding 30 per cent have been identified in.
Development of inflation rates in nigeria the inflation rate for consumer prices in nigeria moved over the past 40 years between 5. Research design and data the analysis in this study is based on time series data for nigerias inflation rate and gross domestic product. Pdf inflation, interest rates and economic growth in nigeria. The researcher had adopted the descriptive research approach for the study of the subject matter. Nigerias macro indicators, foreign exchange details, inflation rate, cbns latest news, documents and publications can be found here. Regression results and diagonistic test for arima models in carrying out the test for arima process, arma 1, 0, 1 was derived and an aic value of 7. Home page of the central bank of nigeria s website. Since mid 1960s, inflation has become so serious and contentions a problem so serious and contentious a problem in nigeria.
The effects of inflation on economic growth will be examined bearing in mind as it is claimed, that a country will grow faster in real terms if inflation is reduced to a barest minimum. The tobin effect of inflation on economic growth of nigeria tobin, another neoclassical economist, 1965 developed mundells model further by following solow 1956 and swan 1956 in making money a store of value in the economy. The history of inflation in nigeria is full of up and down, for example, in the middle of 1970s when there was an oil boom in the economy the rate of inflation goes out of the. In february 2018, the monthly food price index fpi from the food and agriculture organization fao revealed that the index averaged 170. Estimating and forecasting the impact of inflation on economic. Effect of inflation on the growth and development of the nigerian. Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods. This post monitors and report the current inflation rate in nigeria. Nigerias inflation has been higher than the average for african and subsaharan countries for years now, and even exceeded 16 percent in.
There exist controversies in the literature as to whether budget deficit is inflationary or not. The effectiveness of monetary policy in the control of. Pdf analysis of inflation and its determinants in nigeria. Growth appeared to gather pace somewhat in the final quarter of 2019, after quickening activity in both the agricultural and industrial sectors propped up a modest expansion in the third quarter. In february 2018, the inflation rate was reported at 14. May 04, 2019 inflation, economic growth and interest rate concepts that are central and interrelated in macro economic. Pdf inflation is an important macroeconomic issue that has continued to dominate discussions at major economic fora over time. Though nigeria inflation rate fluctuated substantially in recent years, it tended to increase through 1999 2018 period ending at 12.
Inflation rates across emerging economies enjoying higher growth rate like nigeria are as follows. Secondary data that ranged between 19702008 were sourced from the cbn statistical bulletin. The causes of persistent inflation in nigeria central bank of nigeria. The main objective of the study was to investigate the nature of relationship between inflation rate and economic growth rate.
Effect of inflation on the growth and development of the. Inflation, real exchange rate shocks, passthrough, real profits, real broad money supply, inflation persistence, nigeria. This occurs when the rate of rise in prices is in the intermediate range of 3 to less than 10 per cent. The moderation was mostly driven by slower growth of food prices. The effect of inflation and interest rate on economic growth. The data used for this study are monthly allitems inflation rates from 2003 to 2017 collected from the central bank of. The paper is therefore, to determine the impact of vat on the revenue generation in nigeria and the perception of the citizen on vat and inflation. While, only growth of gdp and preceding inflation rate have significant effect on current inflation rate in nigeria during that period. The existence of inflation in nigeria came up in the middle of 1970s when there was an oil boom, the inflation rate manifest on the suddenly since the military government did not assist the situation with the inflation policy through. Jun 15, 2017 nigerias inflation rate fell for a fourth straight month in may, dropping to the lowest in a year as growth in prices of most goods except food eased.
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