Inflation rate has risen to 17.33 per cent in February, 2021 from the 16.47 per cent recorded in January 2021.
The consumer Price Index (CPI) data released Tuesday by the National Bureau of Statistics (NBS) showed that core inflation, which measures inflation without volatile items, rose from 11.85 per cent in January, 2021 to 12.38 per cent in February 2021 .
Similarly, food inflation skyrocketed to 21.79 percent in February 2021 from 20.57 per cent in January 2021.
An economist and also a member of Daily Trust Board of Economists, Dr. Rislanudeen Muhammad, said rising inflation and unemployment implies stagflation which means that the normal Keynesian policy mix typically preferred to deal with economic challenges like Nigeria’s that is suffering from weak, crawling Gross Domestic Product (GDP) growth may not work.
The NBS reported on Monday that the number of people unemployed in Nigeria increased from 21.77 million people in the second quarter of 2020 to 23.19 million people in the fourth quarter of 2020.
Dr Muhammed said Post COVID-19 countercyclical fiscal policy of increased spending via borrowings, quantitative easing and so on are simply not enough.
“Policy makers need to look at the supply side of the economy and consciously use both fiscal and monetary mechanisms to address the tripod of inflation, unemployment and GDP growth, while taming the exacerbating tide of insecurity,” the expert advised.
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