There is need for heightened fiscal policies and more aggressive implementation of government’s food and security programmes in order to ease rising costs of living.
Average inflation expectation was put at about 34.6 per cent for April, but consumer prices had in the last month overshot average estimate. Most analysts expected inflation rate at 34.45 per cent, but some estimated inflation could reach near 35 per cent.NBS had reported that inflation rose from 31.70 per cent in February 2024 to 33.20 per cent in March 2024. Consumer Price Index had risen by 180 basis points from 29.90 per cent in January 2024 to 31.70 per cent in February 2024.
“It’s obvious that monetary policy tools have reached the end of their tether. There is little the CBN can achieve by aggressively increasing the Monetary Policy Rate . This is so because the major factors driving inflation are non-monetary. While noting that the sustained increase in inflation expectations will continue to be a significant consideration by the CBN in deciding the direction of the MPR, such approach could be a double-edge sword with potential to hurt the economy.
“We need to strengthen our security architecture to enable farmers go back to the farm safely as well as incentivising large-scale agricultural production. We also need to increase storage capacity while addressing challenges of transportation in order to improve routes to market for farm products. Afrinvest, which projected inflation rate of 34.4 per cent for April, noted that despite cautious optimism for April, fuel scarcity could throw a spanner in the works.
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