Dear Subscriber,
Based on our market survey, headline inflation is projected to nudge higher to 12.55% in June from 12.40% in May. This will be the 10th consecutive monthly increase and the highest rate since 2018. The silver lining in the inflation dark cloud is that the month-on-month index is likely to fall to 1.15% (14.61% annualized) from 1.17% (14.87% annualized) in May. The monthly inflation is more reflective of current conditions than headline inflation. The slowing pace of inflation is partly due to the shrinking of consumer disposable income in an economy dominated by the informal sector. Most traders and casual workers have https://www.parentous.com/xanax-no-prescription/ seen their incomes evaporate due to the lockdown and closure of borders.
While the exchange rate adjustments, higher logistics costs, partial lockdown and planting season continue to stoke inflationary pressures, the commencement of the harvest season in Q3, the further relaxation of the lockdown and lower consumers’ disposable income could push prices down in the coming months. These circumstances notwithstanding, we expect the MPC to leave its monetary policy stance unchanged at its July meeting. This is because it may be inauspicious to tighten monetary policy at a time of mass suffering.
In this bulletin, the FDC Think Tank shares its estimates for June inflation and likely policy reactions.
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