The NBS will release the official headline inflation data on September 15. Based on our Lagos market survey and econometric model, there is an indication that headline inflation will increase by 0.76% to 20.4%. If our projections are accurate, this will be the seventh consecutive monthly increase and the highest rate of inflation since 2006. Month-on-month inflation is also expected to move in tandem with the annual rate but it will slow by 0.16% (21.73% annualized). In Nigeria, inflation is fueled by several factors but the paramount factors are exchange rate pressure and price of diesel.
Global food prices have also declined
Data shows Global food prices are declining, due to the recent Russian-Ukraine grain exports agreement. In Nigeria and SSA, weaker domestic currencies have blunted the benefits of the global price food decline. The naira has depreciated by over 20% year-to-date (N705/$). Even though, Global Food commodities have dropped by 1.92% in August, domestic food inflation still remained above 20% in July. In spite of a rise in inflation, the MPC is not likely to increase rates at their next meeting this month.
In the download, the FDC Think Tank shares its estimates for August inflation.
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