FDC ECONOMIC BULLETIN – OCTOBER 15, 2021 (Re: Inflation falls again (16.63%), raising eyebrows)

Dear Subscriber,

Nigeria’s headline inflation declined again in September to 16.63% from 17.01% in August. This is the sixth consecutive monthly decline and an eight-month low. The principal inflation moderating factor is the base year effects. A notable trend however is that core inflation (inflation less seasonalities) increased by 0.33% to 13.74% and month-on-month inflation rose by 0.13% to 1.15% (14.77% annualized). This points to the fact that the threat of inflation rising again is potent.

Anecdotal evidence also shows that Nigeria’s inflation cannot be declining when global and regional inflation rates are rising. US inflation increased marginally by 0.1% to 5.4% while the UK spiked by 1.2% to 3.2%. Most sub-Saharan African countries under our review recorded higher inflation rates in September due to currency pressures and higher food and transportation costs. Then, why is Nigeria’s inflation falling at a time when the naira has crashed to an all-time low (N580/$), diesel is being sold at N350/litre and commodity prices are surging? When will the domestic inflation rate finally reach an inflection point? These are some of the pertinent questions on the mind of most analysts and investors.

In the download and link below, the FDC Think Tank shares its thoughts on the impact of September’s inflation numbers on the economy.

Enjoy your read…