The main objective of this study was to investigate the impact of inflation on economic growth in six south asian countries. Timeseries data for the period 1990 2011 were used to examine the impact of inflation on economic gro wth. Ajide1 this paper investigates the role of frazer economic freedom index on fdi growth relationship over the period spanning 1980 through 2010 using annual time series data. Impact of unemployment on economic growth of nigeria.
For example, in 1998 gdp growth rate was relatively high amidst the. Inflation needs to fall further in order to prepare the ground for the central bank of nigeria. How inflation and interest rates are related to economic. This study therefore examines the major economic growth determinants as well as the direction of causality that exists between economic growth and some selected economic growth indicators in nigeria, employing the johansen cointegration and. This paper surveys the existing literature on the relationship between inflation and economic growth in developed and developing countries, highlighting the theoretical and empirical indications. Analysis of inflation and its effect on economic growth in. Inflation, interest rates and economic growth in nigeria. The world bank forecasts global growth to slow to 2. Economic activities leading to expansionary trends in gdp growth and the growth rate of credit and money supply pose no unenthusiastic challenge on inflation. Inflation, however, was found to significantly impact on the economic growth of nigeria. Evidence from a dynamic panel threshold regression approach arcade ndoricimpaa auniversity of burundi, faculty of economics and management, po box 1280 bujumbura african development bank group.
Effects of exchange rate fluctuations on economic growth. Effect of inflation on the growth and development of the. This thesis investigates the effects of unemployment and inflation on economic growth in nigeria between 19862012 through the application of ordinary least square ols technique in estimating the effects of unemployment and inflation on growth, augmented dickeyfuller test and phillip. Study examined the impact of interest rate on economic growth in nigeria from 1990 to 20. The trend between inflation and economic growth in nigeria the facts and figures obtained from the imf world economic outlook report 2011 revealed that the nigeria s gdp tends to be low when the inflation rates are high apart from a few years of the 80s. In addition to the global price of crude oil falling to a year low in january 2016 figure 1. Recommendations are also made to help accelerate the rate of growth. Post comment an overview of the nigerian economic growth and development nigeria. Their analysis was expressed using time series, which. Jaganath 2014 examined the impact of inflation on economic growth in six south asian countries. Promoting economic growth in nigeria using time series analysis believed that the impact of monetary policy could be analyzed in terms of the behaviours of the intermediate targets of consumer price index and inflation rate in promoting economic growth in nigeria. The study is hereby divided into five sections namely the introduction which is section one that consist of the background to the study, statement of the research problem, the hypothesis and. The effect of inflation and interest rate on economic.
As a result, this study sets out to investigate the relationship between inflation. Nigeria economy gdp, inflation, cpi and interest rate. The study was conducted to evaluate the impact of inflation on economic gro wth in the context of an emerging market using empirical evidence from nigeria. Nigeria economic outlook top 10 themes for 2019 disclaimer this document has been prepared for general guidance on matters of interest only, and does not constitute professional advice. Nigerias economic recovery defining the path for economic growth. Pdf effects of financial inclusion on economic growth in. 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. Inflation, economic growth, simultaneous relationship, nigeria introduction low inflation and economic growth are important macroeconomic objectives while achieving low inflation remains a core mandate of central banks. World economic situation and prospects 2018 the united nations. The dependent variable of financial inclusion proxied by contribution of financial institutions to gross domestic product gdp was regressed on the explanatory.
Threshold effects of inflation on economic growth in africa. Download the project from chapter one to five with reference. 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. The study used time series data for the period 1980 to 2012. Stable prices, sustainable growth and low unemployment level has been the major macroeconomic goals being pursued by every developing country, nigeria inclusive. By 1976, however, the inflation rate stood at 23 per cent. An overview of the nigerian economic growth and development.
According to a citigroup report published in february 2011, nigeria will have the highest average gdp growth in the world between 2010 and 2050. Learn more about the nigeria economy, including the population of nigeria, gdp, facts, trade, business, inflation and other data and analysis on its economy from the index of economic. The the economy slowed sharply, as annual real gdp recovery was in part due to a sharp recovery in the. Rather, such activities can only be a boost to the labor market in nigeria. Department of banking and finance, caritas university, enugu, nigeria.
Download this complete banking and finance project material titled. Motivated by this controversial, this study examined the impact of inflation on economic gro wth and established the existence of inflation growth relationship. Before the pandemic, the nigerian government had been grappling with weak recovery from the 2014 oil price shock, with gdp growth tapering. Threshold effects of inflation on economic growth in. This study investigated the impact of inflation on investment and economic growth in nigeria. The study examined the effects of financial inclusion on economic growth in nigeria from 2000 to 2018. 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 5 governments fiscal deficit expands above budget. Impact of inflation on nigeria economic growth mensch mind. Pdf inflation, interest rates and economic growth in nigeria. The effect of inflation price instability in the growth and development of the nigerian economy cannot be overemphasized. World economic situation and prospects 2019 the united nations. Nigeria economic growth growth is seen slowing sharply this year amid intensifying headwinds. Economic growth and the balanceofpayments constraint. First, though voluminous works have been conducted on economic freedom and economic growth with foreign direct investment as an intervening variable, we are.
Does unemployment significantly impact on economic. Effects of unemployment and inflation on economic growth. This study investigates how inflation and interest rates are related to economic growth of india. Since nigerian financial sector liberalization is anchored on interest rate and exchange rate deregulation and the inflation targeting monetary policy, therefore exchange rate was incorporated in the study.
In 2016 during its first recession in 25 years, the economy contracted by 1. Archival data sourced from central bank of nigeria statistical bulletin was used for the estimation of the variables. A multivariate regression approach was employed to estimate augmented growth models. The recession was driven by a large contraction in the oil sector. 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. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. The aim of the study was to determine the relationship between inflation and economic growth in nigeria for a longer period of 54 years. In the 1970s, however, the concept of stagflation gained prominence, and the validity of the positive relationship was questioned. An analytical study of the impact of inflation on economic. Given the major distortions caused by it in the economic growth of the country and the living standard of the citizenry, various administrations in nigeria in the past and. The study concluded that a decreased in bank lending rate increased economic growth during the study period. Limited number of studies on the responsiveness of economic growth to inflation has created a gap in knowledge. Economic growth is the most powerful instrument for reducing poverty and improving. The gross domestic product growth is a long term rise in the capacity to supply increasingly diverse economic goods o its population.
Determinants of economic growth in nigeria central bank of nigeria. In 2017, global economic growth approached 3 per cent the highest rate since 2011. The effect of inflation and interest rate on economic growth of nigeria with abstract, chapter 15, references and questionnaire. The impact of unemployment on economic growth includes. A region or a country can go on exporting as much as it likes. The aggregate supplyaggregate demand asad framework also postulated a positive relationship between inflation and growth where, as growth increased, so did inflation. This study was organized into five different sections.
This study investigated the relationship between inflation rate and economic growth in nigeria with a view to. Based on the above, this research examines the influence of inflation and interest rates on indias economic growth. From the foregoing, over the years, inflation is one of the most crucial macroeconomic problems in nigeria, hence the need for a greater attention to it. Inflation and economic growth in nigeria the main purpose of this study is to ascertain the existence or not of a relationship between inflation and economic growth in nigeria. 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. This page provides nigeria inflation rate actual values, historical data, forecast, chart, statistics, economic calendar and news. The different economic theories state that inflation and interest rates are associated with economic growth based on economic conditions of the nation. Cyclical improvements in argentina, brazil, nigeria and the rus sian federation, as. The methodology employed in this study is the cointegration and granger causality test. Inflation and its effect on economic growth has been a primary concern of policy makers the world over. Impact of inflation on nigeria economic gro wth 19812016. Understanding the impact of the covid19 outbreak on the nigerian. Agricultural production and economic growth in nigeria. Furthermore, the findings of greenwood and jovanovic hypothesis established that as bank lending rate decreased, economic growth tend to increase and it is statistically significant at 1% level.
Determinants of economic growth in nigeria kazeem b. The economy never experienced doubledigit inflation during the 1960s. In recent years, all her efforts to grow the economy, nigeria s rate of economic growth has remained very volatile and sluggish. Threshold effect o f inflation on economic growth in nigeria. The study finds that the impact of inflation on economic growth varies from country to country and over time. Inflation is a social malady as well as a pervasive economic process whose effects are felt by all and sundry in all sectors of the economy. Click the download now button to get the complete project. Download the complete economics project topic and material chapter 15 titled impact of inflation on economic growth in nigeria 1981 2015 here on projects. Strong economic growth therefore advances human development, which.
But it will build up trade surpluses if exports exceed imports. The principal benefit of low inflation is improved certainty and hence the ability to plan. In nigeria, 95 per cent of firms have their own generators due to an unreliable. Abstractthis study was conducted on the inflation and economic growth nexus in nigeria using annual time series data from 1961 to 2014. Inflation and economic growth in nigeria omoke philip chimobi department of economics, ebonyi state university, abakaliki, nigeria tel. Impact of unemployment on nigeria economic growth 19812017 pdf. Inflation and economic growth in nigeria omoke journal. Relatively high annual gross domestic product gdp growth rates over the past decade have not reduced corresponding poverty rates.