Members of the central bank’s monetary policy committee have expressed worry over the impact of the Christmas celebrations on Nigeria’s inflation expectations as we approach the new year.
Reading from excerpts of the personal statements of members of the committee, most cited the increased spending in the period of festivities as a likely fuel to rising inflation.
On a general basis, the members of the committee cited festivities, fuel price increases, and political spending as major contributory factors to rising inflation.
“On the basis of persisting negative real interest rate, flooding that might worsen inflation, festivities and election spending and the need to be consistent and credible, I vote to raise MPR by 100 basis points.”
Specific comments from members
According to Adamu Edward Lamtek, his decision to support a rate increase was also due to the impact of year-end festivities.
“It is estimated to increase further in December due to the expected impact of year-end festivities. The disinflation process requires that the Bank locks-in expectation of further increases in prices. In effect, I saw the need to promptly regain control of inflation expectation by sustaining policy tightening in order not to put credibility at risk.”
Another member, Adenikinju, Adeola Festus, also points to the fact that December festivities will drive up inflation in December 2022.
CBN Deputy Governor, Obiora, Kingsley Isitua also posits rising inflation rate will also be exacerbated by
“Inflation expectations in November 2022 was 19.93%, lower than projected inflation of 21.29%. However, the December festivities may drive up inflation expectations again. Petrol queues in some parts of the country are also likely to impact on output growth and inflation.”
Sanusi, Aliyu Rafindadi cited the drop in the month-on-month inflation recorded in October as a positive, however, he was quick to identify the impact of the Christmas celebration on inflation numbers.
“I am convinced that, although the month-on-month inflation has begun to moderate and the rate of rise in the headline inflation decelerated, the expected increase in spending for Christmas celebrations and electioneering campaigns could be significant sources of inflationary pressure.
Important to add that month-on-month inflation rose in November 2022 and could be on track to rise in December.
What the data says about December inflation: Data from the NBS reveals inflation has risen month on month every December compared to November, since 2020.
- The inflation rate has also risen month on month every year since 2009 except for 2017 – 2019 when it dropped.
dont be silly, its the other way round. Inflation is bad for christmas