New report sees inflation dropping by year end, predicts new naira rate

• According to a recent analysis, Nigeria's inflation is predicted to decline by the end of 2024
• A lack of infrastructure, high energy costs, among other factors are the main drivers of inflation
• According to the company's projections, the exchange rate will be N1,100 to $1 in the best-case

Norrenberger has stated that as efforts by both monetary and fiscal authorities strengthen, Nigeria's inflation is expected to drop by the end of 2024.

The most detrimental effects of growing interest rates were felt by those who made the greatest contributions to the economy. Photo Credit: Cavan Images
Source: Getty Images

In addition, a 3.1% GDP growth rate was predicted by the Norrenberger Economic Outlook (NEO), titled "Nigeria: Beyond the Reforms," which was electronically issued on Thursday.

The country's inflation problem is still very real, according to Pabina Yinkere, Business Head of Norrenberger Assets Management, who also presented the report.

The main causes of inflation are COVID-19, the conflict between Russia and Ukraine, a lack of infrastructure, high energy costs, unequal purchasing power, and the elimination of fuel subsidies.

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Yinkere said,

Additionally, the company projected that in the worst event, the exchange rate will be N2,000 to $1, and in the best situation, N1,100 to $1.

The worst-case scenario will be facilitated by rising global tensions, additional electricity tariff increases, a decline in crude oil production below 1.2 million barrels per day, and Dovish CBN policy, according to the report.

The best-case scenario will be facilitated if oil production exceeds 1.5 million barrels per day and Dangote Refinery fully operates, as this will increase supply and improve economic activity.

The report also pointed out that the people who contributed the most to the economy were also the most negatively impacted by rising interest rates and unstable currency rates.

Tony Edeh, CEO of Norrenberger, stated that the forecast was combined with a panel discussion of seasoned financial specialists to exchange viewpoints and discuss current issues in order to offer specific suggestions for economic development and progress.

Analysts give simple conditions to ending FX challenges

Legit.ng reported that Goldman Sachs experts claimed that Nigeria's inflation was being exacerbated by the naira's ongoing depreciation.

The experts are pushing for more than a 100 basis point increase in interest rates by the Monetary Policy Committee.

According to a Bloomberg article, the largest economy in Africa has seen little to no reduction in inflation, and the MPC would need to make a sizable rate change to significantly affect inflation.

Source: Legit.ng