Dear Subscriber,

The National Bureau of Statistics (NBS) will release its November inflation report next week (Friday, December 15). Our forecast is that headline inflation will increase marginally by 0.17% to 27.50% (an 18-year peak). The food and core sub-indices are expected to witness marginal increases, rising to 31.8% and 22.72% respectively.

Month-on-month Inflation is declining

Whilst headline inflation has maintained its upward trend, the cheery news is that the slope of the curve is flattening out. This coupled with the projected 0.18% decline in month-on-month inflation to 1.54% (20.23% annualized) suggests that inflation may be heading towards a point of inflection and could begin to taper as early as Q1’24. This will make the 2024 budget inflation goal of 21.4% a more realistic target. Notwithstanding though, Nigerian inflation is still 19% above the upper band of the CBN target (6-9%) and is much higher than the SSA average of 16.8%. The MPC will meet in January 2024. The consensus opinion is that the CBN will hike its monetary policy rate by at least 100 basis points to 19.75%p.a. The Apex bank had earlier reiterated its determination to focus primarily on the goal of price stability and not be distracted by unorthodox activities.

The FDC Think Tank shares its estimates for November inflation and the likely policy reaction in the download and link below.

Enjoy your read!