Economists predict stagflation for Nigeria in 2022

Economists have predicted Nigeria’s inflation rate at 12% and an 8.2% economic growth rate in 2022 which is the third worst inflation rate out of over 32 countries surveyed by Bloomberg.

Nigeria was third from bottom behind Turkey and Argentina with an inflation rate target at the end of Q4 of 12.1%, the European and South American nation had 21% and 46.7% respectively. In terms of GDP Growth rate, they projected 2.8% growth 9th from Bottom higher than countries like Chile, Mexico, Turkey, Russia, Hong Kong. South Africa and Brazil were next to bottom and bottom respectively.

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This is tantamount to a Stagflation which is a combination of rising inflation rate and tepid GDP growth rate. Countries in stagflation find it extremely difficult to exit due to the intersection between inflation and GDP growth rate. Typically, higher inflation rate should be good for GDP growth rate if the inflation rate is single digits.

The prediction by a diverse pool of economist indicates the world expect Nigeria to remain in stagflation in 2022, a common feature of the Buhari administration. Despite the grim forecast, the CBN believes inflation rate will moderate in 2022 citing their unorthodox policies.

Nigeria has suffered high inflation and tepid GDP growth rate in the last 4 years as multiple devaluations, crash in oil prices and the Covid-19 pandemic hampered any effort geared towards economic recovery.