FDC ECONOMIC SPLASH – MARCH 12, 2024 [Re: February Nigeria’s Headline inflation will reach 31.04%]

Dear Subscriber,

The National Bureau of Statistics will release February 2024 inflation data this Friday, sparking anticipation after the MPC’s 400bps rate hike in its last meeting. Our forecast indicates an increase in headline inflation (Y-o-Y) to 31.04%. Also, food inflation at 36.87%, and core inflation at 24.62%, based on our Lagos market survey and econometric model. Notably, out-of-season food commodities like beans, rice, tomatoes, and pepper have seen sharp price increases, driven by cost-push inflation factors, including forex translation costs. For instance, the price of imported rice has surged to N95,000 from N70,000, a 35.7% increase.

Transmission lag of MPC decision

The MPC’s tightening of monetary policy, including raising the MPR, aims to address rising inflation. However, the full impact on inflation and economic stability will unfold gradually over time, with a noticeable delay due to transmission lags. Similarly, despite rate hikes, the US inflation rate in February ticked up, indicating a delay in the impact effect due to transmission lag.


The MPC at its next meeting is likely to maintain the status quo while waiting to see the effect of its last hike. In the month of March, we expect to see an aberrational movement in food prices due to the confluence of Ramadan and Easter. Hence, inflation may remain elevated in the coming month.

In the download and link, the FDC Think Tank shares its estimates for January inflation and likely policy reactions.

Enjoy your read!