Dear Subscriber,

The NBS released its January CPI report this morning. The data shows a marginal decline (0.03%) in official headline inflation to 15.60%. This time, the inflation statistics is reflective mainly of seasonal factors (harvest and post-Christmas blues). This is corroborated by the increase in core inflation (inflation less  seasonalities) and the decline in the other sub-indices.

Since January, there have been notable economic developments which suggests that  inflation is likely to be on the increase again in February. Some are seasonal, some are structural and fundamental to the Nigerian economy. Fuel scarcity, especially the sharp rise in the price of  diesel to N410-N420/litre, planting season and currency pressures are all likely to propel another cycle of price increases.

Inflation risks remain elevated

The risk of higher inflation and weakness of policy hawks add another level of uncertainty to the timing of interest rate hike in Nigeria. Most African Central Banks are going back into another cycle of tightening by increasing interest rates.

In the download, the FDC Think Tank shares its thoughts on the impact of January’s inflation numbers on the economy.

Enjoy your read…