A report from the Central Bank of Nigeria has warned of more financial strain for Nigerians, according to The Punch.
The Punch said the report noted that more Nigerians may rely on borrowing to cover increasing expenses over the next six months.
The report indicated that household expenditures will continue to rise through the remainder of 2024 and into January 2025.
The survey on household expectations revealed that numerous Nigerian families may diminish their lifetime savings to meet financial commitments in the coming months.
This information was detailed in the July 2024 Inflation Expectations Survey Report published on the CBN’s official website on Tuesday.
The Inflation Expectations Survey for July 2024 was conducted from 14th July to 26th July, involving 1,600 businesses and 1,650 households across all 36 states and the Federal Capital Territory.
The purpose of the survey was to measure how businesses and households perceive current and future inflation trends, as well as the primary drivers of inflation.
By understanding these perceptions, policymakers can better manage monetary policy to stabilise the economy and promote growth, the report explained.
According to the Central Bank of Nigeria, the survey revealed that 83.7 percent of respondents viewed the current level of inflation as high, with an overall perception index of -61.1 points.
A breakdown of the survey responses showed that businesses, with an index of -58.7 points, are slightly less pessimistic about inflation compared to households, which have an index of -63.3 points.
The report indicated that businesses perceive the current inflation rate more favourably than households do.
However, analysis revealed that large businesses are particularly concerned about inflation, with an index of -70.8 points, reflecting a strong belief that the current inflation level is excessively high.
The CBN also assessed consumer perspectives across three key dimensions, including economic conditions, family financial situations, and family income.
This comprehensive approach, the CBN said, would help to capture a broader view of how inflation impacts individuals and families, providing valuable insights for managing monetary policy and addressing economic challenges.
The report indicated that all income groups are experiencing worsening family financial situations, with many anticipating the need to either deplete their savings or incur debt in the coming months.
The CBN’s report noted that consumer confidence was broadly pessimistic for the three months ending in October and November 2024.
“This pessimism would persist into the following month and the subsequent three months, with confidence indices of -21.8 and -9.1 points, respectively,” the report stated.
It attributed this negative outlook to deteriorating economic conditions and declining family financial situations, as consumers expressed concerns about relying on savings or accumulating debt to meet their financial needs.
Meanwhile, Nigerian consumers also anticipated a rise in inflation across all reviewed periods. The report highlights that inflation indices were -62.2 for the current month, -53.7 for the next month, -41.7 for the next three months, and -29.0 for the next six months.
“Most consumers expect price increases in several expenditure categories this month. Specifically, anticipated price hikes are significant for transportation (68.9 points), medical expenses (67.7 points), purchases of cars or motor vehicles (67.1 points), house purchases (66.8 points), and rents (63.4 points),” the report further revealed. Both businesses and households perceive the July 2024 inflation rate as high, reflected by a negative index point of -61.1, it stated, indicating widespread concern about the current inflationary environment.
However, most respondents identified changes in energy prices, exchange rates, and transportation costs as the primary drivers of inflation in July 2024.(Dailey trust)
