November saw an 18-year high in Nigerian inflation, while India saw greater expansion in cereal and vegetable prices
The vast majority of people worldwide, including those in Pakistan, have been impacted by inflation, but the thing that worries them the most is the rising cost of food. This is in addition to rising fuel, power, and gas prices.
Meanwhile, rising food costs are maintaining and escalating overall inflation, signaling that rate cuts are unlikely anytime soon and that the monetary tightening that has been recommended by leading financial institutions and central banks will continue.
As a result, interest rates in Pakistan and other developing countries will continue to remain at historically high levels. These are the poorest countries that are most negatively impacted by this trend, which also includes currency devaluation and higher import costs as a result of rising commodity prices on the world market.
As a result, they will never be able to break free from the vicious cycle of rising interest rates and inflation.
It is important to keep in mind that the majority of people living in developing and impoverished countries belong to low-income groups. Their already extremely low nutrition intake and living standards are made worse by their declining purchasing power, which is robbing them of one of their most fundamental rights: food.
The largest economy in Africa saw a worsening cost-of-living crisis in November, when Nigeria’s annual inflation increased for the eleventh consecutive month to the highest level in eighteen years. This increased pressure on the central bank to address the rise.
November consumer inflation increased to 28.20 percent from 27.33 percent in October, according to data released on Friday by the National Bureau of Statistics.
According to official data, Nigerians have not seen inflation this high since August 2005.
The World Bank issued a warning to Nigeria on December 13 about the need to control inflation. The central bank was also given instructions to tighten monetary policy, increase market confidence in free foreign exchange pricing, and gradually stop making so-called “ways and means” advances to the government.
According to the statistics bureau, increases in the prices of food and non-alcoholic drinks were the main cause of annual inflation in November.
The majority of Nigeria’s inflation is attributed to food inflation, which increased to 32.84 percent in November from 31.52 percent in October.
The depreciation of the naira, rising fuel and food prices, logistics expenses, and an expansion of the money supply, according to analysts, are some of the main causes of Nigeria’s inflation.
Nigeria, the most populous country in Africa, has seen double-digit inflation since 2016, which has eaten away at incomes and savings even though the central bank raised interest rates at its most recent meeting to levels not seen in almost 20 years.
Read More: Inflation Rates reaches all time High
At its most recent monetary policy meeting in July, the central bank decided against raising interest rates by as much as 25 basis points as anticipated, stating that a moderate increase would better stabilize inflation expectations while still promoting investment.
According to a previous report, rising food prices in November caused India’s retail inflation to increase at its quickest rate in three months, which increased expectations that the central bank would not lower interest rates anytime soon.
November saw an increase in annual retail inflation from 4.87 percent to 5.55 percent. This, however, fell short of the 5.70 percent rate that an economist polled by Reuters had predicted.
Food inflation increased from 6.61 percent in October to 8.70 percent in November, making up almost half of the total consumer price basket.
Four economists estimated November’s core inflation, which excludes volatile food and energy prices, to be between 4.05 and 4.2 percent, up from 4.20 to 4.28 percent in October. Core inflation statistics are not made public by the Indian government.
India has taken several actions to curb price increases since the July inflation spike of more than 7 percent. Certain exports of rice, wheat, sugar, and onions have been prohibited. To control food inflation, the government has stated that it will implement additional policies.
India’s economy grew by an astounding 7.7 percent in the first half of the year.
Thamashi De Silva of Capital Economics stated, “We believe that the RBI will only begin easing policy in the second half of 2024 due to elevated food prices and strong economic growth.”
