As widely anticipated, Nigeria’s headline inflation dipped for the 3rd consecutive month to 11.25% in March. This brings the average inflation in Q1’19 to 11.31%. Interestingly, all the sub-indices, except for the month-on-month inflation, declined. The sustained moderation in the price level can be partly attributed to a stable exchange rate, money market illiquidity and an improvement in power supply.
Month-on-month inflation (a better reflection of current prices and inflation expectations) increased by 0.06% to 0.79% (9.84% annualized). This shows that inflationary pressures are mounting, and a reversal in the headline inflation trend in the months ahead is imminent.
At the next MPC meeting, we expect the committee’s decisions to be premised on inflation expectations rather than historical data.
In the attached bulletin, the FDC Think-Tank analyses the inflation for March and its impact on the economy and policy-making in Q2.
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