In line with our forecast and general consensus, Nigeria’s headline inflation inched up by 0.03% to 11.40% in the month of May. This is the second increase in 2019. The marginal rise in the general price level was as a result of the seasonal fall in food supply as evidenced by higher food inflation (13.79%). The good news is that the Core sub-index (which is inflation less seasonalities) fell by 0.3% to 9.0%.
The month-on-month inflation (a better reflection of current prices and inflation expectations) continued its increasing trend, rising by 17bps to 1.11% (14.23% annualized) in the month of May. Even though the rise in the headline inflation is marginal, the sustained increase in the monthly general price level suggests that inflationary pressures are intensifying. The MPC, at its next meeting in July is likely to be more aggressive in its policy decisions.
In the attached bulletin, the FDC Think-Tank analyzes the inflation data for the month May and its impact on economic policy environment.
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