An Economist, Prof. Uche Uwaleke, has expressed optimism that the Federal Government would meet its target of 15.74 inflation rate as contained in the 2017 budget.
Uwaleke, the Head of Banking and Finance, Nasarawa State University, made this known in an interview in Abuja.
He said the government could meet this target if there was absence of any serious shock to the economy either from oil price or output.
He also expressed optimism that in the coming months Nigeria’s inflation rate would trend further downwards in the wake of favourable developments in the international oil market.
The don said: “The drop in headline inflation from 17.78 per cent in February to 17.26 per cent in March is a welcome development.”
Given the import-dependent nature of the economy, the appreciation of the Naira in recent times came as no surprise due to the CBN’s sustained intervention.
The CBN’s sustained intervention in the forex market is moderating inflationary pressure from pass-through effect of high exchange rates.
It was also expected that the high food and non-food prices recorded in the corresponding period of 2016 provided a base effect on the inflation rate for March 2017.
Be that as it may, the key driving factors; namely electricity, fuel, housing and transportation services remain.
This is understandable though as these challenges are fundamentally structural and will take some time to address.
According to t a recent report by the National Bureau of Statistics (NBS) it shows that the country’s inflation rate dropped by 0.52 per cent in March to close at 17.26 per cent.
According to the report, the declined rate is the second recorded in two months with the first drop of 0.94 per cent which closed at 17.78 being witnessed in February.
“It represents the effects of stabilising prices in already high food and non-food prices as well as favourable base effects over 2016 prices.”
“It is also indicative of early effects of a strengthened Naira in the foreign exchange market.”
Source: Voice of Nigeria