FDC ECONOMIC BULLETIN – SEPTEMBER 15, 2022 (Re: Inflation jumps to 20.52% despite harvest season)

Dear Subscriber,

The National Bureau of Statistics (NBS) released the August inflation data this afternoon. As was widely anticipated and consistent with our forecast, Nigeria’s official headline inflation came in at 20.52%. This is the seventh consecutive monthly increase and the highest level in 17years (2005 inflation rate 24.3%). According to the NBS, the rise in food inflation is driven by an increase in the prices of bread, wheat, yam, meat and oil. This shows that the weakness of the naira is still feeding into domestic prices especially wheat, sugar and vegetable oil. The numbers further reveal moderation in month-on-month food inflation due to harvest seasonality effect. Core inflation remained stubbornly high at 17.20%.

African countries still battle inflation despite the decline in global food prices.

Many African countries are facing similar inflationary pressures especially Ghana 33.9%, Rwanda 20.4%, Uganda 9% and South Africa 7.8%. This shows that exogeneous pressures continue to impact African economies. With this elevated rate of inflation, there is a probability that the interest rate hawks will be emboldened with a view to further tightening at the next MPC meeting at the end of September.

In the download and link below, the FDC Think Tank shares its thoughts on the impact of August inflation numbers on the economy and policy environment.

Do enjoy your read…