As earlier projected, Nigeria’s headline inflation increased by 0.02% to 11.28% in November after a decline in October. Some optimists had suggested that the decline in October was likely to be the beginning of a trend. The uptick in November was mainly attributable to a rise in the food index to 13.30%. This increase in food prices is in response to higher seasonal demand due to Christmas celebrations. Core inflation (inflation less seasonalities) though, fell marginally to 9.8%.
The month-on-month index increased alongside the headline inflation, rising to 0.80% (10.02% annualized) from 0.74% (9.92% annualized). The increase in the price level was mainly due to cost push pressures ranging from higher diesel prices to a weaker naira in the forex market.
The CBN at the last MPC meeting had forecast a slight increase in the price level, hence they retained their contractionary stance.
In the attached bulletin, the FDC Think-Tank analyses the inflation data for November and its impact on economic policy and the business environment.
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