Nigeria’s inflation rate may rise by at least 100 basis points in the coming months as the ongoing Middle East crisis continues to disrupt global supply chains and energy markets, the chief economist at the Development Bank of Nigeria, Prof Joseph Nnanna, has warned.
Nnanna, who spoke at the inaugural Investors Roundtable organised by VNL Capital Asset Management, said the escalation of the conflict involving Iran is already triggering fresh inflationary pressures globally, with Nigeria not insulated from the shocks.
Inflation had moderated slightly to 15.06 per cent in February from 15.1 per cent in January, even as year on year food inflation rose to double digits. “I guarantee you, minimally, you will see at least 100 basis points increase in inflation in the next CPI report,” he stated, explaining that the ripple effects of the crisis extend beyond oil, impacting food prices, transportation, and overall cost of living.
“Inflation cuts across every facet of our lives, transportation costs, cost of doing business, and even just living generally. Food will go up, energy prices will go up, everything happens at once,” he said.
According to him, the disruption in global trade routes, particularly around which about 20 per cent of global oil supply passes, has intensified the situation. “The reality is that this is an economic shock. Beyond oil, you have electronics, pharmaceuticals and other goods passing through that route. Any disruption has a lasting effect on the global economy,” Nnanna added.
He noted that the impact is already evident in fuel price volatility across markets, including Nigeria, where prices have fluctuated significantly since the outbreak of the crisis.
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