Nigeria's Economic Conundrum: Unpacking the Links: The Inflation Consumption-Growth Nexus in Nigeria - An Empirical Analysis

Steady increase in the average price of goods and services in a nation is known as inflation, and it has a significant impact on many facets of the economy, most notably private consumer spending and overall economic expansion. Therefore, using annual time series data gathered from the Central Bank of Nigeria Statistical Bulletin (CBN), National Bureau of Statistics (NBS), and World Bank data for the years 1980 to 2023, this study investigates the relationship between inflation and private consumption spending in Nigeria. Descriptive statistics and the Augmented Dickey Fuller and Phillips-Peron pre-test were used in the investigation. The study used the following independent variables: inflation, interest rates, private consumption expenditure, exchange rates, and real gross domestic product (RGDP) as the dependent variable. The findings showed that economic growth will decrease by 148.03 percent and 80.05 percent, respectively, for every 10% increase in inflation and private consumption spending. According to the study's findings, Nigeria's economic growth was significantly impacted by both inflation and private consumption spending. The findings recommend, the government should combat inflation and stabilize prices while making sure that spending is focused on items that would promote economic expansion.