As widely expected, headline inflation jumped to its highest level in almost four years, serving as a rude awakening to the CBN that its fight against inflation is failing. It is now approximately 8% above the upper limit of 9%.
It is also notable that monthly and core inflation are declining, meaning that we might be approaching a point of inflection, in which inflation will begin moderating. The planting season, which has just started might delay the moderating curve of inflation. However, the recent increase in interest rates in the fixed income market may be signaling to the market that the days of artificially low interest rates are over.
With GDP numbers to be released shortly and expected to come slightly better than originally envisaged, there might be some good news on the horizon.
In the publication, the FDC Think Tank analyses the recently released January inflation numbers and the likely implications.
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