FDC ECONOMIC BULLETIN – SEPTEMBER 10, 2019 (Re: Inflation Set to Inflect Upwards)

Dear Subscriber,

Inflation – What Goes Down Will Go Up Again!!

After a short period (2 months) of declining inflation, we might just be approaching a point of inflection. Our survey is projecting that headline inflation will increase marginally by 0.07% to 11.15%. At this point in time, it is not the nominal inflation that matters but the trend that will make policy makers scratch their heads. A reversal of the inflation trajectory just ahead of the payment of the new minimum wage and arrears is like pouring fuel on to fire.

Border Closure: Unintended Consequences

There are indications from our survey that the monthly inflation will also increase by 0.10% to 1.11% (14.15% annualized). The partial closure of Nigeria’s road borders is disrupting informal trade, the engine of consumer activity in Nigeria. This will be an issue on the agenda of the MPC meeting later this month.

In this publication, the FDC Think Tank shares its estimates for August inflation and likely policy reactions.

Do enjoy your read…