ABSTRACT

 The study investigated the impact ofinflation on private consumption expenditure in Nigeria covering the period of1981 to 2018. The objectives ofthe study were to determine the impact ofinflation rate on private consumption expenditure in Nigeria and to evaluate a sustainable long run relationship between inflation rate andprivate consumption expenditure in Nigeria. The study employed the unite root test, Johansen cointegration test and error correction mechanism, thus revealed that, inflation rate has a negative and significant impact on private consumption expenditure in Nigeria, exchange rate has a negative but insignificant impact on private consumption expenditure in Nigeria and there is a sustainable long run relationship between inflation rate andprivate consumption expenditure in Nigeria. From thefindings, the study recommended that; despite the insignificant impact ofmoney supply, the government should still adopt monetarypolicy that will encourage increase in money supply in the economy in order to increase purchasingpower ofcitizens in the country. There is an urgent needfor government to reduce inflation rate. Thus, in a long run increase will increase private consumption expenditure in Nigeria. There is also need to reduce exchange in order to attract moreforeign and local investment to the country which will increase the circulation ofmoney and also individual access to money