The World Bank has said there is a possibility that the monetary policy tightening by the Central Bank of Nigeria (CBN) will not address the ravaging inflation in the country.
The World Bank made the disclosure in its global economic prospects report released on Wednesday.
It said one of the risks of Nigeria’s economic growth is the failure of tightening policies on inflation.
The tightening of the monetary policy rate (MPR) is the increase of interest rate to control soaring inflation.
Since the resumption of the Monetary Policy Committee (MPC) meeting this year, interest rates have increased from 22.75 per cent in February to 26.25 per cent in May – a total increase of 750 basis points.
The World Bank in its latest report noted that: “Risks to Nigeria’s growth outlook are substantial, including the possibility that the tightening of monetary policy stops short of reining in inflation.”
The report also predicted Nigeria’s economic growth rate outlook for the rest of 2024 and 2025 to remain the same. “Growth in Nigeria is projected to pick up to 3.3 per cent this year and 3.5 per cent in 2025,” the World Bank said.
“After the macroeconomic reforms’ initial shock, economic conditions are expected to gradually improve, resulting in sustained, but still-modest growth in the non-oil economy.
“In addition, the oil sector is expected to stabilise as production somewhat recovers”, it stressed.
