Dear Subscriber,

The February CPI report was released today by the NBS on schedule. Headline inflation rose by 10bps to 15.70% after a marginal decline last month, largely reflecting higher energy costs. For the first time in over four years, food inflation moved in the opposite direction of headline inflation, further reinforcing the fact that the increase in inflation this time around is principally due to cost-push factors.

The 0.14% increase in core inflation (inflation less seasonalities) to 14.01% also indicates that future inflation is likely to rise in line with the global and regional trend. In the NBS basket, the weights ascribed to utilities and energy (housing, water, electricity, gas and other fuel) is 16.73%.

Will the CBN continue with the status quo ritual?? May be not…

The February inflation report is coming a week ahead of the monetary policy committee meeting. Major considerations will centre around the change in inflation direction and the risks of a run-away inflationary trend. At least eight Central banks, most notably, the Federal Reserve will be meeting this week. The consensus is that most will tighten monetary policy to combat the Russia/Ukraine invasion-induced inflation. The US Fed is likely to hike policy rates by 25bps. This increases the probability albeit remote that the CBN will raise rates this time around.

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

Enjoy your read…