FDC ECONOMIC BULLETIN – JULY 15, 2022 (Re: Headline inflation rises to 5-year high of 18.60%)

Dear Subscriber,

The National Bureau of Statistics released the June inflation report this morning. The data showed that official headline inflation accelerated by 0.84% to 18.60%, in line with our forecast (18.40%). This is the fifth consecutive increase in the headline inflation rate since February (cumulative increase of 2.9%), and the highest inflation level in 5-years.

Inflation is being driven by a combination of factors, mainly the surge in the price of diesel. Diesel is a major fuel for powering generators and food delivery trucks. In addition to energy costs is the falling value of the naira in the forex market. There has been a general increase in prices the world over. The response so far has been a tightening of monetary policy in most countries.

CBN to hike rates by at least 50bps

The Central bank is widely expected to hike interest rates at its next policy meeting scheduled for July 18 & 19. This would be in line with international trends and align with the CBN’s mandate to fight inflation.

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

Enjoy your read…