Headline inflation is projected to increase marginally to 11.35% in October 2018 from 11.28% in September. This will be the 3rd consecutive month of rising inflation after a sustained period of declining price level. However, our forecast is for a fall in the monthly inflation due to a variety of factors.
An imminent increase in the minimum wage is likely to fuel inflationary pressures and push the fiscal deficit of both Federal and State Governments in the next few quarters. An increase in inflation compounded by a spike in the unemployment numbers to be released this month will increase the misery index which is currently 51.28%. This could be politically expensive for the incumbent government.
In the attached bulletin, the FDC Think-Tank is projecting the inflation numbers for October.
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