The World Bank has projected that inflation may hit 25 per cent in 2023 as a result of petrol subsidy removal.
The Washington-based bank noted that although there will be a significant increase in 2023, headline inflation will fall by the first quarter of 2024.
The bank says the removal of the petrol subsidy is anticipated to cause a temporary increase in inflation in the upcoming months before contributing to disinflation in the medium term.
It says Headline inflation is expected to rise from 18.8 percent in 2022 to 25 percent in 2023. However, by Q1 of 2024, the subsidy removal will start to have a disinflationary effect, meaning that it will alleviate inflationary pressures despite higher petrol prices.