Major causes of inflation speculation in stock market due to budget delay, rise in domestic oil price due to subsidy removal, fall in the global crude oil price deteriorating nigeria exchange rate, almost the household price skyrocket as seen in the image below inflation nigeria inflation rate currently stands. Determinants of inflation in nigeria between 1981 and 2003 it was revealed that fiscal deficits, money supply, interest and exchange rates have positive and significant impact on inflation rate in nigeria during the period under review, which points that the very causes of inflation are multi-dimensional, very similar to. Contributor to inflationary developments in nigeria, and that money supply accounts for up to 345 per cent of aggregate price nigerian economy as the gdp nests all the structural factors that impact inflation key words: demand for increase in the money supply can cause a sustained increase in real. This paper therefore examines the extent to which exchange rate depreciation will cause inflation in nigeria, using the recent autoregressive (ardl) bounds testing cointegration procedure developed by pesaran et al  the period covered by the work is 1986 to 2008 the paper proceeds as follows:. Causes of inflation in nigerian using an autoregressive distributed lag model concludes that exchange rate depreciation, monetary growth and real output constraints are the main explanatory factors for the behavior of inflation in that country on the relationship between inflation and money supply in ghana, chhibber and. In the nigerian example, the case of excess liquidity (excess funds in the system) is an exergenerated one and often, deceptive the real economy the then minister of finance (alhaji adamu ciroma) agreed that such n437 billion deficit would cause inflation and negate the poverty eradication policy.
What are the main causes of inflation inflation is a sustained rise in the general price level inflation can come from both the demand and the supply-side of. According to the keynesians, increased private and government spending, natural disasters, or increased prices of inputs, and price/wage spiral are the causes of inflation however, ezirim (2005) has shown with the aid of econometrics that monetary factors cause inflation in emerging markets like nigeria. The problem of inflation in nigeria is chiefly associated with the failure to address the structural weakness in the economy, especially the failure to diversify the economy, and reduce dependence on oil exports given the major distortions caused by inflation on the country's economic growth and the living standard of the.
Given the key factors driving inflation in nigeria, the need for complementary fiscal measures cannot be over-emphasised the high cost of fuel, road transport as recognised by john keynes, the famous economist, the major cause of unemployment is weak aggregate demand any attempt to increase the. Economy by the central bank of nigeria through their policy drive it is in this context that this current study is interested in re-examining the above raised question 'is money supply a cause of high inflation in nigeria ' the essence of this is to determine the actual and immediate cause of the inflationary. Attempted empirically to ascertain the cause of inflation in nigeria oyejide (1972) made empirical enquiry into the impact of deficit financing on inflation and capital formation he related domestic money supply to inflation using fishers type of equation since there seems to exist a direct correlation between. Nigeria's inflation rate fell for a fourth straight month in may, dropping to the lowest in a year as growth in prices of most goods except food eased “food inflation persisting so far in 2017 is cause for concern, and we expect that trend to continue,” michael famoroti, an economist at lagos-based vetiva.
Keywords: oil price fluctuation, inflation trends, oil price shock, fiscal channel introduction the trends in inflation rates in nigeria reflect the monetization of oil revenue, which causes increase in money supply this is exacerbated by the cash orientation of nigerians and the penchant for carrying. Aim/purpose – the aim of this study is to empirically investigate the influence of money supply on inflation in nigeria the study was borne out of the curiosity to re- examine the immediate cause of the alarming rate of inflation in nigeria which is ad- versely affecting the general welfare of nigerian populace. An explanation of the different causes of inflation including excess demand ( demand-pull inflation) | cost-push inflation | devaluation and the role of expectations.
An analysis of the possible determinants of inflation in oil exporting countries specifically (algeria, iran, nigeria, saudi arabia and venezuela) is conducted in this paper the study covers the period from 1991 to 2014 using panel data analysis findings show that high inflation is associated with high oil price, low money. Consumer prices in nigeria advanced 133 percent year-on-year in march of 2018, easing from a 143 percent gain in the previous month and below market consensus of a 145 percent rise it was the lowest inflation rate since march of 2016, mainly due to a slowdown in prices of food and housing and.
Variables in the model are stationary and the results of causality suggest that gdp causes inflation and not inflation causing gdp the results also revealed that inflation possessed a positive impact on economic growth through encouraging productivity and output level and on evolution of total factor productivity a good. He causes of inflation in nigeria has been attributed by the previous discussant the three fundamental variables: cost-push factors, excess-demand factors. Inflation is thus felt in the construction sector of the economy by the increase in construction material prices kaming et al (1997) stated that inflationary increases in material cost is the major cause of construction cost overruns in nigeria wahab (1985) further established that the prices of building materials in nigeria have.
Caused by money supply growing faster than the rate of economic growth the broad objective of this study is to examine inflation and growth in developing countries especially in nigeria with the view of ascertaining its effect on the nigerian economy it ascertained the relationship between inflation and economic growth as. There are 4 types of inflation: creeping, walking, galloping and hyper how cost- push and demand-pull cause them plus asset, core and wage inflation. The causes of persistent inflation in nigeria victor o asekunowo 1 this study sought to identify the traditional and institutional inflation variables responsible for inflation phenomenon and the magnitude of the contribution of the identified variables to the rise in general price level secondary data on key macroeconomic. Basically since volatility in inflation possess more threat than inflation on the average and this volatility is noticeable in the nigerian inflation rate (see figure 1 below) there is need to determine whether it is a cause or caused by fiscal deficit similarly, large deficits are now the addictive nature of the federal government.
The causes of inflation in nigeria traditional monetarist stresses the importance of the link between money supply and inflation and argued that inflation is always and everywhere a monetary phenomenon (mishkin, 2011) friedman (1983) opined that inflation has a monetary character because it results from the rise. This research work is to examine the reasons of inflation and economic growth in nigeria showing how inflation can affect every sector in the economy, to identify the causes and examine the pattern of managing inflation in nigeria the secondary data was employed for this work the ordinary least square (ols) criterion. E-mail of corresponding author: [email protected] abstract this research work examined the causes and effects of inflation in nigeria between 1969 and 2009 and what could be done to ameliorate the negative effects on the economy the time series variables properties on some selected variables were.