Nigerian’s Inflation Drops Again But ...
The Nigeria Bureau of Statistics, NBS has released the inflation figures for July. It did show that the decline run that started since February last years has continued in July, but it is not yet Uhuru as the single-digit target by the authorities remains elusive.
The NBS said on Wednesday that the annual inflation slowed to 11.14% in July, its lowest level in more than two years.
Meanwhile the rate of decline has slowed compared with earlier this year, even as the Central Bank of Nigeria, CBN governor, Godwin Emefliele, has warned that it may start to rise later this year as spending increases before the 2019 elections.
The CBN is now looking for ways to boost credit while keeping a lid on inflation.
The price index, which fell from 11.23% in June, was still above the central bank’s target of single-digit inflation.
In fact, the CBN had said it would consider cutting the main interest rate, that is the benchmark interest rate, from the record high of 14%, which it has maintained for two years, if inflation were to come down to single-digit.
More so, a separate food price index showed inflation at 12.85% in July, compared with 12.98% in June.
Food inflation has been in double digits for almost three years but has slowed for more than six months.
NBS said the rise in the food index was caused by increases in prices of potatoes, yam and other tubers, vegetables, bread and cereals plus fish and fruits.
“We see inflation edging up moderately in August and September, before slipping below 11% in Q4. However, there is upside risk to this view from the expansionary ... budget, pre-election spending, potential wage increases and security challenges,” Yvonne Mhango, economist at Renaissance Capital, wrote in a note.
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