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CBN Report Highlights Increasing Financial Strain on Nigerians |
The Central Bank of Nigeria (CBN) has issued a report warning of escalating financial pressures on Nigerians. The report suggests that more Nigerians may need to rely on borrowing to manage rising expenses over the next six months.
According to the report, household expenditures are expected to continue increasing through the end of 2024 and into January 2025.
The survey on household expectations revealed that many Nigerian families might exhaust their lifetime savings to meet financial obligations 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 July 14th to July 26th, involving 1,600 businesses and 1,650 households across all 36 states and the Federal Capital Territory.
The purpose of the survey was to gauge how businesses and households perceive current and future inflation trends, as well as the main drivers of inflation.
By understanding these perceptions, policymakers can better manage monetary policy to stabilize 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 favorably 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: economic conditions, family financial situations, and family income.
This comprehensive approach, the CBN said, aims 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 is expected to 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.
However, most respondents identified changes in energy prices, exchange rates, and transportation costs as the primary drivers of inflation in July 2024.
Looking ahead, they anticipated further increases in their expenditures throughout 2024, emphasizing the urgent need for the CBN to lower interest rates to help alleviate financial pressures.
