Professional services firm, PricewaterhouseCoopers (PwC Nigeria), has forecast that Nigeria’s headline inflation may decline marginally to 29.5 per cent by the end of the year.
The firm, which stated this in its latest Nigeria Economic Outlook, released yesterday, said it projects, “a marginal decline in inflation to 29.5 per cent by year end, balancing the effects of reforms, policy actions, external pressures and food prices; particularly in the second half of the prices outlook year.”
Noting that inflation increased from 22.41 per cent in May 2023 to 33.95 per cent in May this year, PwC said the increase was driven by the rise in food, utilities and transportation inflation.
Specifically, it stated that “Headline inflation rose to 33.95 per cent in May 2024 from 22.4 per cent in May 2023, the highest since April 1996. The largest drivers of inflation were food (40.6%), utilities (29.6%), and transportation (25.6%).
“The rise in food inflation was due to low agricultural productivity, poor logistics and insecurity in the food producing regions of the country.
“Utilities inflation was due to the increase in price of rent, electricity, water supply and other fuels while transport inflation was due to increase in price of petroleum products including PMS.”
PwC further stated: “The rise in inflation driven by food (40.6%), utilities (29.6%), and transport (25.6%) continues to erode purchasing power of households and businesses,” adding that the, “Central Bank of Nigeria’s (CBN) reform actions has not yet tapered the continuous rise of headline inflation, which was 33.95% in May 2024.”
In addition, the firm said that while it projects that the country’s Gross Domestic Product (GDP) may grow marginally by 2.9 per cent, “on the back of sustained policy reforms, growth prospect may be limited by elevated economic pressures.”