Inflation to reach 30% by December 2023 – KPMG

Reputable financial adversary service firm, KPMG is confident that Nigeria’s inflation would berth at 30 per cent this year.

Currently, inflation stands at 26.72 per cent as at September.
The reports said, recent reforms such as the fuel subsidy removal) and unification of the foreign exchange market will be responsible for the projected spike in prices of goods and services. 

KPMG made this known in its macroeconomic review for the first half of 2023 outlook for the year’s second half.

It reads, “We anticipate that the current inflationary pressure in the economy will persist into the second half of 2023…

“Specifically, our model suggests that the combined influence of fuel subsidy removal and foreign exchange liberalisation may drive headline inflation to about 30 per cent by December 2023.”

“Monetary Policy Rate (MPR) hike will not curb inflation
On how to control inflation, the report explained that the current MPR hike being adopted by the apex bank in the last 18 months has proven ineffective in stalling the increasing inflationary trend.

However, it advised that addressing issues such as energy and transportation costs, supply chain problems, and boosting local production will be more effective than increasing interest rates.

According to the report, “We expect the Nigerian economy to grow by 2.6 per cent in 2023, lower than the revised World Bank’s 2023 forecast of 2.8 per cent for Nigeria and the 3.1 per cent growth rate achieved in 2022.”