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Investments glossary

Inflationary Gap Definition

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\'\'It is therefore doubtful if President Mohammadu Buhari will be able to deliver his campaign promises to Nigerians if the price of crude oil which accounts for some 90% of Nigeria’s total export revenue and 75% of total consolidated revenue continue to hover around $50 per barrel between now and 2019.\'\' Chika Onuegbu in his 2015 paper titled “HISTORICAL OVERVIEW OF THE IMPACT OF GLOBAL OIL POLITICS ON CRUDE OIL PRICES, INVESTMENTS AND EMPLOYMENT RELATIONS IN THE NIGERIAN OIL AND GAS INDUSTRY”

— Chika Onuegbu

An inflationary gap is a macroeconomic concept that describes the difference between the current level of real gross domestic product (GDP) and the anticipated GDP that would be experienced if an economy is at full employment. This is also referred to as the potential GDP. For the gap to be considered inflationary, the current real GDP must be the higher of the two metrics.


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