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IMF says inflation to further drop in 2024 - Nigeria's situation remains dire

The statistics office said the February headline inflation rate showed an increase of 1.80 per cent compared to the January headline inflation rate.

Nigeria's inflation hits 31.70% in February as food prices surge

Kristalina Georgieva, Managing Director of IMF, was quoted in a statement by the Fund on Thursday to have said this at the China Development Forum (CDF) 2024, in Beijing.

The event was hosted by the Atlantic Council Think Tank.

She urged central bankers to carefully calibrate their decisions on cutting interest rates to incoming data.

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Georgieva said headline inflation for advanced economies was 2.3 per cent in the final quarter of 2023, down from 9.5 per cent just 18 months ago, and the downward trend was expected to continue in 2024.

According to her, this will create the conditions for central banks in major advanced economies to begin cutting rates in the second half of the year.

She, however, said that the pace and timing would vary.

“On this final stretch, it is doubly important that central banks uphold their independence,” Georgieva said.

She urged policymakers to resist calls for early rate cuts when necessary.

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“Premature easing could see new inflation surprises that may even necessitate a further bout of monetary tightening.

“On the other side, delaying too long could pour cold water on economic activity,” she said.

Georgieva said next week’s World Economic Outlook would show that global growth is marginally stronger given robust activity in the U.S. and many emerging market economies, but gave no specific new forecasts.

She said the global economy’s resilience was being helped by strong labour markets and an expanding labour force, strong household consumption and an easing of supply chain issues, but said there were still “plenty of things to worry about”.

“The global environment has become more challenging. Geopolitical tensions increase the risks of fragmentation.

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“As we learned over the past few years, we operate in a world in which we must expect the unexpected,” Georgieva said.

She said global activity was weak by historical standards and prospects for growth had been slowing since the global financial crisis of 2008-2009.

“The global output loss since the start of the COVID-19 pandemic in 2020 was $3.3 trillion, disproportionately hitting the most vulnerable countries.”

Georgieva said the U.S. had seen the strongest rebound among advanced economies, helped by rising productivity growth.

“Euro area activity is recovering more gradually, given the lingering impact of high energy prices and weaker productivity growth.

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“Among emerging market economies, countries like Indonesia and India are faring better, but low-income countries have seen the most severe scarring.”

The News Agency of Nigeria (NAN) reports that Nigeria’s annual inflation rate rose to 31.70 per cent in February from 29.90 per cent in January, the National Bureau of Statistics (NBS) said on Friday.

The statistics office said the February headline inflation rate showed an increase of 1.80 per cent compared to the January headline inflation rate.

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