Inflation is expected to continue its upward trajectory in October
Our forecast is for headline inflation to rise for the second consecutive month to 11.6% in October from 11.24% in September. The principal drivers of this increase remain the supply shocks with underlying cost-push pressures. The border closure, in addition to the heavy rainfall and flooding in key regions of the country, impeded supply and pushed up commodity prices. Month-on-month inflation is also expected to move in the same direction with the annual price level, rising by 0.02% to 1.06% (13.54% annualized).
MPC meets later this month: What to expect
The MPC meetings are scheduled to hold on November 25/26. One of the major considerations will be the uptick in the inflation figures. However, the shift to monetary expansion in advanced economies (the US Fed has cut rates for the third time this year) gives the MPC headroom to maintain status quo as capital reversals are expected to slow.
In this publication, the FDC Think Tank shares its estimates for October inflation.
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