As widely anticipated, headline inflation declined marginally to 15.98% in September from 16.01% in August. Food and core inflation moved in opposite directions in the month of September.
Fundamentally, inflation in Nigeria is moderating, but could swing upwards if there is a surge in money supply and wages increase sharply. So far in 2017, M2 has contracted by 11.06% but the velocity of circulation has increased.
The harvest season has also begun and is expected to increase supply and moderate prices. However, cost-push factors such as diesel (N200 per litre) continue to increase costs.
In the attached bulletin, the FDC Think-Tank analyses inflationary movements in September and provides a summary of commodity price movements this week.
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