The Impact of Inflation on Manufacturing Sector Output Growth
The Impact of Inflation on Manufacturing Sector Output Growth
ABSTRACT
The study examined the impact of inflation on manufacturing sector output growth from 1981-2016 using annual time series secondary data and ordinary least square estimation technique.
The empirical finding of the study reveals that inflation has a positive significant impact on Nigeria’s manufacturing sector output growth.
The study therefore recommended that government should always monitor the rate of inflation in the country so as to ensure it does not spiral out of control and have deleterious effect on the economy.
INTRODUCTION
Inflation has remained a chronic problem for the Nigerian economy over the years. Inflation is not a new word in the world economy and not out rightly bad but the case of Nigeria is severe and if not properly checked it can destabilize the entire economic frame work.
This problem has brought about reduction in purchasing power, discouragement of real investment, balance of payment disequilibrium and unemployment.
Inflation in Nigeria can be said to be a direct result of the policies of the government to stimulate a fast rate of economic growth and development. Inflation trend since independence shows two distinctive period. Until 1969 we had single digit inflation and even a negative growth rate in 1963, 1967 and 1968.
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