Inflation Inches to 8.3% for Fifth Month

The National Bureau of Statistics (NBS) on Monday released the Consumer Price Index for the month of July, stating that increases in the prices of bread, meat and cereals had pushed up the country’s inflation rate to 8.3 percent. This is the fifth consecutive month of year-on-year increase in the inflation index.
The CPI report noted that the 8.3 per cent recorded in July represented an increase of 0.1 percentage point over the 8.2 percent recorded in June. Since a decline of the headline index in January, prices had continue to trend upwards, however, at a slow pace, increasing by 0.1 percentage points (year-on-year) each month between February and July.
Razia Khan, analyst with Standard Chartered Bank said, headline Consumer Price Index (CPI) for July at 8.3 percent year-on-year (y/y), is a touch softer than the 8.4 percent y/y earlier forecast. She said, despite the fifth consecutive y/y rise in headline CPI, the overall detail suggests that inflationary pressures may be moderating.
“Surprisingly, given the overlap between Ramadan and July, food prices did not appear especially pressured. (This is not atypical for Nigeria which tends to buck the global trend in this respect). Food prices increased to 9.9 percent y/y in July from 9.8 percent in June. In month-on-month (m/m) terms however, food prices were up 0.8 percent m/m – the same rate of change in food prices seen for four consecutive months. There was little sign of any heightened pressure in July.
There are some signs that core inflation is moderating. Core CPI eased to 7.1 percent y/y in July, rising only 0.2 percent m/m (from 8.1 percent y/y and 0.7 percent m/m a month prior). This was due to slower price increases in a range of items – including clothing and footwear, housing, water and electricity and gas and other fuel.
In all, the m/m change in headline inflation has slowed – to 0.65 percent m/m in July, from 0.77 percent in June. With 12 months inflation running at 8.0 percent in July, we see little change in policy soon, despite still-liquid market conditions.

Leave a Reply

Your email address will not be published. Required fields are marked *