Timeseries data for the period 1990 2011 were used to examine the impact of inflation on economic growth. On the other hand, there are some economies that witness economic downturn as an aftermath effect of inflation. The effect of remittances on the nigerian economy o. Effect of inflation and interest rate on economic growth. The aim of this research work is to find out the effects of unemployment on nigeria economy. Analysis of inflation and its effect on economic growth in nigeria. Impact of inflation on nigeria economic growth 19812016. Impact of inflation on nigeria economic growth mensch mind. Firstly, the impact of the inflation rate on economic growth with the possibility of two threshold levels for pakistan using annual data from 1961 to 2008 is examined and secondly, nonlinear. For this category of countries, inflation has an adverse or negative effect and in such economy, inflation is intolerable. The implication of these findings is that nigerian economy will experience slow development in spite that vat has a positive effect on revenue generation.
The effect of inflation and interest rate on economic. The study employed secondary data covering the period 1980. Effect of inflation on the growth and development of the. Consequeuntly, the need to understand the relationship between inflation and economic growth of the nigerian economy become imperative and the dynamics of.
Inflation and its effect on pakistan economy inflation and its impact on the pakistan economy. The main thrust of this study was to investigate the effect of interest rate fluctuation on the economic growth of nigeria. The impact of oil on nigerias economic policy formulation preamble economic policy is the actionstatement of the government pertaining to particular sectors of the economy, describing the intended objectives and how to achieve them. The effects of inflation on economic growth and on its macroeconomic determinants.
Uniprojects aim of providing this effect of inflation and interest rate on economic growth of nigeria project research material is to reduce the stress of moving from one school library to another all in. Max and mark 2008 examined the effect of inflation on growth using panel of transition countries. An analytical study of the impact of inflation on economic growth in nigeria 19702016 sunusi yahaya enejoh1. Effect of exchange rate volatility on nigeria economy. Pdf effect of value added tax on the nigerian economy. Cause effect solution of inflation in nigeria is a complete project materials for download in msword or pdf. Discover how it can help or hinder the economic recovery. Pdf the impact of unemployment on economic growth in. Doguwa1 this paper reexamines the issue of the existence and the level of inflation threshold in the relationship between inflation and growth in nigeria, using three different approaches that provide appropriate procedures for estimating the threshold level. Impact of inflation and unemployment on nigeria economic growth 19812017. Cause effect solution of inflation in nigeria myschooltrick. To expose the effects of corruption on nigeria economy and the way forward, think of numerous problems you face daily in the country, and they will be clear to you. The effects of inflation on economic growth and on its macroeconomic determinants muhammad khan to cite this version. After independence, the nigerian economy seemed very promising.
Iheke department of agricultural economics michael okpara university of agriculture, umudike, nigeria abstract this study analyzed the effect of remittances on the nigerian economy. Anono abdulrahman zubairu lecturer department of management technology. The end of the inflation after world war ii was also. Inflation is the rise in the prices of goods and services in an economy over a period of time. The study recommended that government should adopt tight monetary policy measures to stabilize tide of inflationary pressures on our economy. Impact of inflation and unemployment on economic growth of. In this sense, we investigate the direction of causality between inflation and fiscal deficit in nigeria, using annual data from the nigeria economy for the period 1970 to 2005. Threshold effects of inflation on economic growth in. The payment system in nigeria is predominantly cash and the prominence of cash for transaction purposes increases.
The importance, effect, causes, relationship, comparison, history, role, solutions are discussed. Pdf inflation, interest rates and economic growth in nigeria. He points out that there was a spectacular turnaround in inflation just after world war i in the united states, when inflation dropped from 20% to minus 26% in just a year and a half. Based on inflationary perspective, our state of nation has been captured thus.
Please, sit back and study the below research material carefully. However these high levels of economic growth have not translated to the expected increase in employment opportunities for a rapidly growing young population. As a result of study was found out that nigerian authorities should set interest. The findings also shows that there is strong relationship between inflation and economic growth in nigeria, that exchange rate has positive impact on economic growth and that high interest rate discourages investment and hence forestalls economic growth. Analysis of inflation and its effect on economic growth in. Inflation and unemployment impact economic the economy through reduction in purchasing power, rising unemployment, rising poverty, lower aggregate demand, poor foreign and domestic investment, poor economic growth among others. This is in a bid to support the federal governments effort in mitigating the severe economic impact of covid19 pandemic and the crash in oil prices.
Inflation has been plaguing the nigeria economy for decades. When the general price level rises, each unit of the functional currency buys fewer goods and services. Get free research paper on impact of inflation on government spending on nigeria economy 1981 20 project topics and materials in nigeria. The impact of monetary policy rate on inflation in nigeria. Effect of inflation and interest rate on economic growth of nigeria project material. Political, economic, bureaucratic, judicial, moral and electoral are types of corruption existing.
An empirical analysis fatukasi bayo department of economics adekunle ajasin university, akungbaakoko abstract this study investigates the determinants of inflation in nigeria between 1981 and 2003. This page provides nigeria inflation rate actual values, historical data, forecast. The study was conducted to evaluate the impact of inflation on economic growth in the context of an emerging market using empirical evidence from nigeria. Unfortunately, the reverse has been the case in nigeria as more nigerian naira is being spent on imported goods. The results show that inflation has a negative effect on exchange rate, consumer price index cpi and economic growth in nigeria. In any economy, the problem of inflation has always remained an issue due to its effect. Internation journal of business and economic sciences applied research, 11. Inflation has various effect on the economy as a whole of which economic growth and interest rate are of great important. Effect of exchange rate volatility on nigeria economy 19912010. Effect of inflation on nigerian economy free essays. However, much less agreement exists about the precise relationship between inflation and economic performance, and the mechanism by which inflation affects economic activity. Not every episode shows that ending inflation has an adverse effect on employment.
Pdf threshold effect of inflation on economic growth in nigeria. Using time series data spanning forty one years 19702011 which was obtained from the central bank of nigeria cbn statistical bulletin volume 22, and central bank of nigeria. Effects of corruption on nigeria economy and the way forward. The right level of economic growth, and thus the right level of. The impact of monetary policy rate on inflation in nigeria emerenini, fabian m. An analytical study of the impact of inflation on economic. This is approved for students in accountancy, business, computer science, economics, engineering, arts. Changes in interest rate determines the rate of inflation. Find out about the main causes of inflation in nigeria in this article. Analysis of the effect of inflation, interest rates, and.
Economic outlook 3 contents theme 1 oil prices still lower for longer theme 2 economy growth gets a boost from high oil prices theme 3 inflation declines sharply, driven mainly by base effects theme 4 monetary policy rate set to fall, and then rise theme. Nigeria economic outlook top 10 themes for 2019 nigeria not among the fastest growing economies in subsaharan africa ssa by percentage growth in gdp the largest economies in subsaharan africa offer opportunities for business growth, particularly when considering an expansion into new regions country gdp growth rate africa rank world rank. The country experiences on inflation is no longer the problem but the fact that inflation problem seems to have reached the crisis dimension. Motivated by this controversial, this study examined the impact of inflation on economic growth and established the existence of inflation growth relationship. Gdp and preceding inflation rate have significant effect on current inflation rate in nigeria during that period. The nigeria economy has experienced robust gdp growth rates over the reform period 2000 to 2010. Having a view on the impact of inflation on nigeria economy and realizing that the problems caused by the impacts of inflationary growth is becoming unbearable to the citizens and the entire economy, of becomes necessary to critically analyzed the impact of inflation on nigerian economic growth 19802006. The effect of inflation and interest rate on economy growth in nigeria is quite a serious problem. Effect of inflation on the growth and development of the nigerian economy an empirical analysis aminu umaru lecturer department of economics school of management and information technology modibbo adama university of technology yola,adamawa state, nigeria. It has continued to the major macroeconomic be objectives of the government.
Individuals in this model, substitute current consumption for future consumption by either. Effect of inflation on the growth and development of the nigerian. Colonialism is a major feature of the economic history of nigeria. Causes, effects and solution of inflation in nigeria.
Furthermore, the payment system is a vital link between the financial and the real sector of the economy. Evidence from a dynamic panel threshold regression approach, working paper series n 249, african development bank, abidjan, cote divoire. Having a view on the impact of inflation on nigeria economy and realizing that the problems caused by the impacts of inflationary growth is becoming unbearable to the citizens and the entire economy, of becomes necessary to critically analyzed the impact of inflation on. A series of unfortunate political and economic events have stalled nigerian growth.
Britain eventually gained control of nigerian administration. The findings also shows that there is strong relationship between inflation and economic growth in nigeria, that exchange rate has positive impact on economic. Two research hypotheses were formulated to investigate the relationship between interest rate and economic growth and the difference in economic growth before and after interest rate deregulation regime in nigeria. Pdf it is widely believed that price stability promote longterm economic growth, whereas high inflation is inimical to growth.
Monetary policy does not have a significant effect on inflation in nigeria. The tobin effect of inflation on economic growth of nigeria tobin, another neoclassical economist, 1965 developed mundells model further by following solow 1956 and swan 1956 in making money a store of value in the economy. Download the project from chapter one to five with reference. The effect of interest rate fluctuation on the economic. Analysis of the effect of inflation, interest rates, and exchange rates on gross domestic product gdp in indonesia hatane semuel. There is a general consensus that high inflation r ates and interest rate cause problems for aggregate. Determinants of inflation in nigeria international journal of. Inflation has had adverse effects on savings, investment, productivity and balance of payment in the nigerian economy, hence the fall in the growth rate of the.
In the theory of economy, interest rate can be described as a value that is gained in the effort. Inflation impacts the costs of every facet of the economy. Many saw nigeria, with 15% of africas population, as an emerging economy. The effects of inflation on economic growth and on its. The effect of inflation on debtors is positive because debtors can pay their debts with money that is less valuable. Here, you can also find the inflation definition and the information about the current inflation rate in nigeria. The effect of inflation and interest r ate on economic growth in nigeria is a serious malady. Inflation increases marginally, driven mainly by base effects nigeria economic outlook top 10 themes for 2019 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2015 2016 2017 2018e 2019f inflation rate yearly average headline inflation accelerates from 2018 estimate of 11. An empirical evaluation of the impact of exchange rate on.
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