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HomeTop NewsMore Nigerians predict weaker economy as inflation hits the roof

More Nigerians predict weaker economy as inflation hits the roof

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By Samuel Bankole

Many Nigerians believe that the country’s economy would end up weaker if prices start to rise faster than they do now, this is according to a survey by the Central Bank of Nigeria (CBN) in the third quarter of 2020.

On Monday, the National Bureau of Statistics (NBS) reported a jump in the inflation rate to 14.2 percent, for the 14th consecutive period compared with 13.71 percent in the previous month as food prices rose across Africa’s most populous country.

The CBN survey result showed that 62.1 percent of the respondents believed that the economy would
end up weaker, 9.0 percent stated that it would be stronger, 12.6 percent of the respondents believed it would make a little difference, while 16.4 percent did not know.

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“The responses showed considerable support for price stability, as majority (62.1 percent) agreed that the economy will end up weaker. This is consistent with the notion that
inflation constrains economic growth,” the CBN report released on Thursday showed.

“Respondents were asked to choose between raising interest rates to keep inflation down and keeping interest rates down to allow prices to rise.

“Responding, 25.6 percent preferred interest rates to rise to keep inflation down while 43.3 percent said they would prefer prices to rise faster, 31.1 percent of the respondent had no idea.

“These responses suggest that given a tradeoff, more of the respondents would prefer higher interest rates than higher inflation, which is suggestive of the respondent households’ support for the Bank’s price stability objective,” the bank said.

The survey, however, showed that most responders are not core economists and therefore may be off the mark in their projections on the economy.

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