Finance Analysts expect Nigeria’s inflation rate to drop to its lowest in 2 years

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According to the analysts, the moderation in the inflation figure will be majorly base-effect driven

Analysts expect Nigeria’s inflation rate to drop to its lowest in 3 years play Dr Yemi Kale, Statistician General, NBS (NBS)
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Nigeria's headline inflation is projected to drop below 13% in April, the 15th consecutive monthly decline and the lowest point since March 2016, analysts have predicted.

According to the analysts, the moderation in the inflation figure will be majorly base-effect driven, the impact of the rise in price level in the previous and current year.

The National Bureau of Statistics is expected to release Consumer Price Index (CPI) data for April 2018 this week ahead of the Central Bank of Nigeria monetary policy committee meeting slated for May 21 and 22, 2018.

Omotola Abimbola, investment analyst at Afrinvest told Business Insider Sub-Saharan Africa that inflation headline is expected to print at 12.6% in April 2018

We expect Headline Inflation (Y-o-Y) to print at 12.6%, marking the 15th consecutive decline in Inflation since it peaked at 18.7% in January 2017.

“The moderation will be majorly base-effect driven, as we expect the impact of seasonality to lead to a subtle increase in M-o-M price growth,” Afrinvest said in its report seen by Business Insider Sub Saharan Africa.

In a similar projection, Financial Derivatives predicted 12.7% for the April headline inflation figure.

It is likely to be the 15th consecutive monthly decline and the lowest point since March 2016. The drop is mainly attributable to the waning base year effects.

Also READ: Nigeria's inflation rate drops to lowest in 14 months

“Ironically, month-on-month (MoM) inflation is expected to maintain its upward trend, increasing by 19bps to 1.03% (13.09% annualised) from 0.84% (10.50% annualised) in March. To arrive at this forecast, we employed both quantitative (using ARIMA methodology) and qualitative (critical and analytical reasoning) techniques.

“We also anticipate both food and core inflation (less seasonality) to move in tandem with headline inflation. This is because of the stability of the Naira, but could be undermined by the commencement of the planting season, with price increases associated with the period,” the firm noted.

For FSDH Research, inflation figure is expected to drop to 12.43% in April 2018 from 13.34% recorded in the month of March.

“Despite the increase recorded in the prices of some food and non-food items, the base effect of the Composite Consumer Price Index (CCPI) in April 2017 will depress the inflation rate.

In March 2018, Nigeria's inflation rate dropped for the 14th consecutive month to 13.34%, year on year from 14.33% in February 2018.

The National Bureau of Statistics (NBS) in its CPI report for March 2018 released on Thursday, April 12, 2018, said the Consumer Price Index (CPI) increased by 13.34% (year-on-year) in March 2018.