We are forecasting that annual headline inflation for December will climb to 11.37% from 11.28% in November. Essentially, this rate of increase in inflation has more than quadrupled by 0.09% from 0.02% last month. While in quantum and nominal terms it is not worrisome, directionally it will be a cause for concern for policy makers.
The monthly inflation which is a better reflection of current prices and inflation expectations is expected to decline. This should provide some relief for the doves in the MPC at their next meeting on Jan 21/22.
In the attached bulletin, the FDC Think Tank shares its estimates for December inflation and its implications on your business.
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