ANALYSTS PROJECT SLOWDOWN IN NIGERIA'S INFLATION RATE
1. Inflation Rate Projection:
- Current Status: Inflation in Nigeria is projected to slow down in July 2024 compared to June, when it stood at 34.19%.
- Upcoming Data: The National Bureau of Statistics (NBS) is expected to release the official inflation figures for July 2024 on Thursday.
2. Recent Trends:
- June Inflation: The headline inflation rate rose to 34.19% in June, up from 33.95% in May. This increase was driven by higher food prices, especially for cereals and wheat.
- Food Inflation: As of June, food inflation was at 40.87%, up from 25.25% in June 2023. Major contributors to the increase included higher prices for items like millet, garri, yam, and various oils and fish.
3. Analysts' Projections:
- Lukman Otunuga (Senior Financial Market Analyst, FXTM): Projects a cooling of inflation to 33.95% in July, down from 34.19% in June. This is expected to be a result of the Central Bank of Nigeria's (CBN) aggressive rate hikes.
- Meristem: Expects a slowdown in food inflation due to increased supply of key staples like yam, tomatoes, and rice. They forecast a decrease in the headline inflation rate to 33.42% and food inflation to 39.71%.
- Afrinvest: Anticipates a decline in headline inflation to 33.12% for July, driven by lower food prices and a high base effect from July 2023. However, concerns about fuel scarcity and foreign exchange volatility could impact the rate.
4. Factors Affecting Inflation:
- Food Prices: Ongoing issues in food production, naira depreciation, and inflationary pressures are significant factors.
- Policy Measures: Recent policy initiatives, such as re-opening land borders and a duty-free window for food imports, are expected to provide some relief.
5. Future Outlook:
- General Expectation: Analysts suggest that, barring any major economic shocks, inflation rates are likely to continue on a downtrend for the latter half of 2024, providing some relief to consumer purchasing power.
1. Inflation Rate Projection:
- Current Status: Inflation in Nigeria is projected to slow down in July 2024 compared to June, when it stood at 34.19%.
- Upcoming Data: The National Bureau of Statistics (NBS) is expected to release the official inflation figures for July 2024 on Thursday.
2. Recent Trends:
- June Inflation: The headline inflation rate rose to 34.19% in June, up from 33.95% in May. This increase was driven by higher food prices, especially for cereals and wheat.
- Food Inflation: As of June, food inflation was at 40.87%, up from 25.25% in June 2023. Major contributors to the increase included higher prices for items like millet, garri, yam, and various oils and fish.
3. Analysts' Projections:
- Lukman Otunuga (Senior Financial Market Analyst, FXTM): Projects a cooling of inflation to 33.95% in July, down from 34.19% in June. This is expected to be a result of the Central Bank of Nigeria's (CBN) aggressive rate hikes.
- Meristem: Expects a slowdown in food inflation due to increased supply of key staples like yam, tomatoes, and rice. They forecast a decrease in the headline inflation rate to 33.42% and food inflation to 39.71%.
- Afrinvest: Anticipates a decline in headline inflation to 33.12% for July, driven by lower food prices and a high base effect from July 2023. However, concerns about fuel scarcity and foreign exchange volatility could impact the rate.
4. Factors Affecting Inflation:
- Food Prices: Ongoing issues in food production, naira depreciation, and inflationary pressures are significant factors.
- Policy Measures: Recent policy initiatives, such as re-opening land borders and a duty-free window for food imports, are expected to provide some relief.
5. Future Outlook:
- General Expectation: Analysts suggest that, barring any major economic shocks, inflation rates are likely to continue on a downtrend for the latter half of 2024, providing some relief to consumer purchasing power.