The FDC Think Tank anticipates a paltry increase of 0.05% in the headline inflation rate to 18.6% in January from 18.55% in December. If actualized, this may mark the beginning of a reversal in the inflationary trend.

Consumer price movements in January were analyzed through a triad of factors including seasonality effects, supply-side shocks and exchange rate pass through effects via export smuggling.

The rising threat of narrow money https://drcatalona.com/online-pharmacy/ (M1) growth due to the excessive generosity of the CBN (interventionist funds), has the potential to further exacerbate inflationary conditions. If this trend continues the CBN will need to abandon its role as an economic fire extinguisher and close the intervention cash spigot expediently.

In the attached bulletin, the FDC Think-Tank shares its views on price movements in January.