Dear Subscriber,

The NBS took its monthly inflation report a step further by providing a state by state inflation profile (caveat baskets are dissimilar). The highest inflation was mainly in the northern states, partially due to high food prices. In a perverse way it turns out that the most fiscally irresponsible states with the highest salary arrears are those with the lowest rates of inflation (Kogi, Imo & Delta). That is why they say that every cloud has a silver lining.

Headline inflation slowed for the ninth consecutive month in October, declining to 15.91% from 15.98% in September. Month-on-month inflation also eased to 0.76% (9.54% annualized) in October from 0.78% (9.77% annualized) in September.

In the last 10 months, cumulative inflation is down by 2.81%. This shows inflation in Nigeria has moderated significantly, but could swing upwards if there is a surge in money supply and wages increase sharply, prompting higher demand-pull inflation.

The MPC is scheduled to hold its last meeting for the year on November 20/21. This inflation decline and a possible surge in Q3’17 GDP growth figures may cause the committee to dump its almost predictable status quo position and begin to lower interest rates.

In the attached bulletin, the FDC Think-Tank analyses inflationary movements in September and provides a summary of commodity price movements this week.

Do enjoy your read…