Factors affecting inflation in Nigeria

摘要

This paper investigates factors (domestic and external) affecting inflation in Nigeria using the seasonal autoregressive integrated moving average with additional explanatory variables (SARIMA-X) due to the predictability of past series inflation and the embedded seasonal nature of inflation in Nigeria. The study estimated and evaluated three models for the variant of inflation (headline, food and core) and confirmed the interaction of the filtering effects of external and domestic factors affecting inflation in Nigeria. The paper noted that average fuel premium motor spirits (PMS) prices, total rainfall and any shocks to either food and core inflation or both has an instantaneous impact on the headline inflation with the external factor effect on fuel prices measured by bureau-de-change (BDC) Naira (N/$) exchange rate being significant.