A report from the Central Bank of Nigeria has warned of increased financial strain for Nigerians. The document indicated that more Nigerians may rely on borrowing to fund increasing expenses over the next six months.
The analysis indicated that family expenditures will continue to climb for the remainder of 2024 and into January 2025.
The survey on household expectations revealed that countless Nigerian households may empty their lifetime savings to meet financial responsibilities in the coming months.
The July 2024 Inflation Expectations Survey Report, which was posted on the CBN’s official website on Tuesday, included a full explanation of this information.
1,600 businesses and 1,650 families from all 36 states and the Federal Capital Territory participated in the July 2024 Inflation Expectations Survey, which was held from July 14 to July 26.
The survey’s goal was to find out how families and companies view the main causes of inflation as well as existing and future inflation trends.
The report showed that policymakers may effectively control monetary policy to foster growth and stabilise the economy by comprehending these perceptions.
The Central Bank of Nigeria reported that 83.7 percent of respondents, with an overall perception index of -61.1 points, thought that the present rate of inflation was high.
Businesses, with an index of -58.7 points, are marginally less gloomy about inflation than consumers, with an index of -63.3 points, according to a breakdown of survey results.
According to the survey, businesses have a more positive perception of the current inflation rate than households.
However, study indicated that major enterprises are particularly concerned about inflation, with an index of -70.8 points, showing a strong perception that the current inflation level is overly high.
In addition, the CBN evaluated consumer viewpoints in relation to three major factors: family income, family financial circumstances, and economic conditions.
According to the CBN, an all-encompassing strategy would aid in capturing a more comprehensive picture of how inflation affects people and families, offering insightful management of monetary policy and solutions for economic difficulties.
According to the survey, family finances are getting worse for people in all income brackets, and many of them expect to have to spend all of their savings or take on debt in the near future.
According to the CBN’s study, for the three months ending in October and November of 2024, consumer confidence was generally negative.
“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.
Customers voiced concerns about depending on savings or accruing debt to meet their financial demands, and the report ascribed this gloomy view to falling household financial situations and poor economic conditions.
Nigerian consumers, meanwhile, predicted higher inflation for the whole review period.
Inflation indices were -62.2 for the current month, -53.7 for the following month, -41.7 for the following three months, and -29.0 for the following six months, according to the report.
“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.
A negative index point of -61.1 indicates that both businesses and households view the inflation rate for July 2024 as excessive, reflecting broad anxiety about the current inflationary climate.
Nonetheless, the majority of participants saw fluctuations in energy prices, currency rates, and transportation expenses as the principal causes of inflation in July 2024.
They predicted that their expenses would continue to rise throughout 2024, highlighting the critical need for the CBN to cut interest rates immediately in order to ease financial strains.
