Due to potential new shocks from an increase in energy prices and currency devaluation, inflation will remain in the double-digit region in 2017, an investment bank and research advisory firm, Afrinvest West Africa Limited, has said.
According to its 2017 economic outlook, Afrinvest stated that the outlook on price levels with regard to increase in energy prices, including fuel and electricity, suggests that the inflation rate will remain on the high side.
The Group Managing Director, Afrinvest, Ike Chioke, made this declaration while addressing a press conference in Lagos.
According to its 65-page outlook titled ‘Reform or be Relegated’, Afrinvest noted that the CBN might be forced by possible developments in the currency market to devalue the naira from the current 305/dollar to around 400/dollar.
“If you think about the monetary policy environment, we think that the CBN will be forced by the market to make a change. Currently, the naira is pegged at 305/dollar; we see it moving towards 400/dollar by the end of the year,” the investment bank said.
“If the CBN did take a plunge to make it really market-driven, we can see that even the 400/dollar rate may appreciate later on, bringing to something below 400/dollar.”
The research firm however reiterated the need to put in place economic reforms that would help the country overcome its economic challenges, noting that other commodity-exporting countries such as Russia, Brazil and Egypt have carried out major economic reforms towards stabilising their economy.
It noted that others have embarked on currency reforms, which have enabled them overcome the challenges that came with the fall in commodity prices.
Oladeinde Olawoyin.
Full story at Premium Times NG.
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