Rise in Prices of Airfare, Anti-Malaria Drugs Fail to Lift Inflation in August

In spite of the marginal increase in the prices of airfare, anti-malaria drugs and cooking gas in the month of August, experts say inflation figures will remain unchanged.
Bismarck Rewane, Chief Executive of Financial Derivatives Company (FDC) said the rise in the prices of non-food component was neutralized  by the same margin of fall in the prices of food stuffs.
He particularly said, prices of eggs, cereals, beans and pepper reduced during the month under review.
Rewane in his monthly Economic Publication said, based its analysis of the national consumer price index, “we forecast the headline inflation to remain relatively unchanged at 8.64 percent (±0.13%) in August from the 8.7 percent recorded in July. Our forecast is supported by the moderation in the food index of FDC’s Lagos urban”,.
Also, the high prices of commodities in the base period contributed to the muted inflation in August indicat- ing very little inflationary pressure in the economy.
Given the muted inflationary pressures in August, maintaining the stability of the naira will continue to be the focus of the monetary policy committee (MPC) as it meets on the 23rd/24th of September.
In August, FDC’s Lagos urban inflation was unchanged from July’s 11.57 percent. This was due to a marginal increase in the non-food basket and a decline in the food basket, thereby creating a nil effect. The non-food basket rose marginally by 0.09 percent to 8.80 percent in August due to the increase in domestic air fares and prices of toiletries, anti-malaria drugs and cooking gas. The food basket declined by 1.73 percent to 11.33 percent in August from the previous month due to lower prices of eggs, pepper, cereals and beans.

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