Why 19.64% Inflation Rate is a Red Flag Your Finance
No doubt, there are hot red uncertainties in Nigeria’s macroeconomic environment but even will not fall as fresh market dynamics form. Prices of goods and services have jerked up significantly, making inflation figure look like child splay compare with what Nigerians are facing at marketplaces.
At 19.64%, Nigeria’s inflation rate has a significant impact on how money is priced, on a household’s spending pattern and on overall economic growth and prosperity.
Guess what? No one is spared in this economic dislocation that has not only worsened the costs of living but as well as standard of living of a large number of Nigerians.
Policy somersault, Covid-19 and Russia-Ukraine war drove the global inflation rate to become hot, a pressure point for already struggling private sector activities.
Across the fast moving consumer goods sector, average production costs have risen to an all-time high amidst weak local currency. Companies have few options including production volume reduction, raising prices or doing nothing. The latter appears not to be an option.
Market prices of goods and services are up, productive activities have a slowdown. In every economy, producers and consumers are not allowed to control both sides of the forces of demand and supply.
Those who control demand are not permitted to influence supply. Producers have an economic right to set higher prices, consumers have the right to set volume or size to purchase from producers.
This economic decision game has forced manufacturers to reduce productive capabilities, as shown by some listed companies that have their revenue growth being driven by price adjustments while volume growth slowdown.
On top of that, the unemployment rate is becoming steep. At least 33% of the Nigerian workforce have no job, according to Nigerian Bureau of Statistics data.
While federal government have helped cushion the effect with a social investment worth N350 billion, according to a Budget office document, the number of people living below the poverty line is on the rise.
But how much can government pay anyone to survive this harsh economic situation? More Nigerians are still battling poverty more than seven years after a pro-people government take the mantle of leadership in Africa’s most populous nation.
Despite the pressures on households’ finances, investment markets are tough to predict except for those that were trained in the art. Even, investment experts are finding the financial markets a bit unpredictable due to uncertainties.
How do People cope with unchanged income as price rises?
For those with stable income, you have a choice to make if your earned income is not large enough. You can surely let go of certain habits that will help you cut spending or take risks with that little money you have.
Neither is that easy without doing it correctly though. If you can reduce the amount of food you consume, you may not find it easy to reduce your rent. If you could, it means you just give up something big in your economic equation.
At this time in Nigeria, you cannot afford to sit on your take home if you have a job. You have to make money elsewhere to complement your monthly income – take home, take no one home in Nigeria today.
#Why 19.64% Inflation Rate is a Red Flag Your Finance#