COWRY Asset Management has said that general prices of goods and services will continue to go up this year.

The company said in its yearly review and outlook for the economy and financial markets that inflation rate would also trend up in 2020 as Federal Government embarks on tax reforms, especially Value Added Tax (VAT) and leaves the country’s land border closed.

The company observed in the report said that economic growth rate would remain flattish in 2020 at around 2.3 per cent, moderating the International Monetary Fund, (IMF) 2.5 per cent 2020 forecast, adding that increased consumer spending may be constrained by an expected increase in VAT.

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The report: “We expect general price level of goods and services to be upbeat in 2020, mainly as a result of structural factors and less of consumer demand. “Continued border closure by the fiscal authority, premised on the need to support local industries, is expected to exacerbate cost-push inflation – although there are expectations that the protectionist measure should stimulate domestic output and improve the balance of payments.

“Inflation could be further aggravated in the event of deprecation of the Naira relative to the U.S. dollar triggered by external shocks, especially foreign portfolio outflows. There is also the upside risk of an upward review of electricity tariffs statutorily expected during the year.”

Vanguard