Nigeria’s inflation rate has been predicted by the World Bank to reach 25% this year as a result of the removal of fuel subsidy.
Nigeria may have one of the highest inflation rates in the world and the eighth highest in Sub-Saharan Africa, according to a January 2016 World Bank prediction.
The Bretton Woods institute stated in its June 2023 edition of the Nigeria Development Update on Sunday that inflation would be driven by a rise in commodity prices in reaction to an increase in fuel prices.
The washington-based bank’s report says the removal of petrol
subsidy is not anticipated to cause a temporary increase in inflation in the upcoming months before contributing to disinflation in the medium term.
According to the financial institution, the price increases resulting from the subsidy removal will have a one-time impact on prices primarily affecting petrol purchases for transportation, power generation and certain Services.
The report also predicts that by Q1 of 2024, the subsidy removal will begin to have an inflationary effect despite higher petrol prices.
