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.