Nigeria’s headline inflation is projected to dip to 11% in July, making it the 18th consecutive monthly decline and bringing it to a 29-month low. Notably, the base year effects, which are responsible for this sustained decline in the index, have waned significantly. There is empirical evidence that the rate of increase in consumer prices is slowing and will soon bottom out. This means that the rate of inflation is likely to increase soon.
Month-on-month (MoM) inflation, which has been more volatile, is expected to reduce by 19bps to 1.04% (13.25% annualized) in July. This is due to the decline in the prices of some commodities (tomatoes, semovita and garri). The fall in diesel prices, relative improvement in power supply and a reduction in naira market liquidity have all helped to support the decline in inflation.
In the attached bulletin, the FDC Think-Tank is projecting the inflation numbers for July.
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