The Lagos Chamber of Commerce and Industry (LCCI) has expressed concern that businesses may face more stress in the new year, especially with the constant rise in inflation.
The Chamber, in a statement on the November inflation rate, issued on Monday by its Director-General, Dr. Chinyere Almona, noted that the persistent rise in the inflation rate, which reached a 28-year record high of 34 in November .60, has continued to increase. fuel a tense business environment, as high prices have limited several business operations.
He argued that with inflation persistently rising, businesses should prepare for further stress from the burden of higher interest rates as the new year approaches.
“With the tremendous rate of inflation, the Central Bank's failed attempt to reduce the currency in circulation and the proximity of a high-spending festive period, we will face even higher interest rates as an expected result of the government's upcoming decisions. CBN Monetary Policy Committee (MPC).
“The high inflation rate has far-reaching implications. One of the main effects is the reduction in consumer spending. High core and food inflation erode disposable income, reducing demand for non-essential goods and services.
“Companies also face higher business costs, as rising transportation, rental and energy costs raise production expenses, reducing profit margins,” he argued.
However, the Chamber argued that while the impact of interest rates in curbing inflation had not been effective in recent months, it believed that the economy could see better performance from reform measures to boost production in the new anus.
“Hopefully, we can see a greater impact of these measures on fundamental indicators such as inflation, interest rates and exchange rates,” he added.