Former Director-General of the National Bureau of Statistics (NBS) and current Group Chief Economist at Afreximbank, Yemi Kale, has clarified what economists mean when they describe an economy as “stable.”
In an article on Saturday, Kale noted that stability in economic terms does not necessarily translate into an immediate end to citizens’ hardships.
“When economists say an economy is stable, they usually mean that the economy has reached a point where it is no longer experiencing major fluctuations or disruptions,” Kale explained.
According to him, stability often implies that key macroeconomic indicators such as inflation, exchange rates, and GDP growth have steadied, creating predictability and boosting confidence for businesses, investors, and consumers.
He gave an example of inflation falling from 25 percent to 12 percent and holding steady, which could be seen as stability. However, he stressed that this does not mean prices have fallen back to previous levels.
“Even in a stable economy, if incomes are low and basic goods remain expensive, families still face hardship,” Kale said, adding that stability might only mean conditions are not getting worse quickly, not that they have improved enough to ease daily struggles.
The economist outlined two key reasons why stability can coexist with hardship: the stabilization phase, where the bleeding stops after a crisis but citizens continue to suffer from high costs; and the lag effect, where businesses and investors benefit from stability before households feel relief through jobs, higher wages, or lower prices.
He likened stability to stopping a boat from rocking wildly. “For citizens, stability may only mean less new hardship is being added, not that life has become easier yet. But the first step to reversing hardship is stability and stopping the bleed. It’s a necessary but not sufficient condition,” Kale said.
He emphasized that his views were purely technical and not political.