Tuesday, FBNQuest released a report stating their expectation on a further uptick in inflation rate to 11.8 percent for December 2018.
This will represent an increase by 0.52 basis points from November inflation rate of 11.28 percent according to data released by the National Bureau of Statistics (NBS).
BusinessDay year-to-date (YTD) analysis of inflation rate movement revealed that average growth in inflation rate stood at 12.21 percent between January and November.
Inflation rate declined significantly in the first seven months of the year to 11.14 percent from 15.13 percent before it began experiencing a slow uptick in the last four months.
According to the NBS report, price pressures were particularly high for fuels and lubricants, personal transport as well as for medical services.
Against the single digit inflation targets of the Central Bank of Nigeria, the MPC in November observed that the near-term upside risks to inflation remained.
The disruption to agricultural production and distribution arising from flooding, insurgency in the North-East, high cost of energy, anticipated spending in the run-up to Christmas festivities and campaign-related spending towards the upcoming 2019 general elections.
In response to the festive period among other factors, the All Share Index (ASI) at the end of November dropped to its lowest points of 30,611.55 in a year six months.
So far, the market has maintained the 30,000 points range on the All Share Index as sell off pressure build in celebration of the Christmas season. This may likely push upwards pressure on food inflation.
In November, month on month inflation was 0.8 percent, compared with 0.7 percent recorded in the previous month. The pattern for food prices was similar however, with an increase from 0.8 percent to 0.9 percent.
To this end, FbnQuest posited that, “Our view is similar to the CBN/MPC. Looking ahead to December, we see inflation at 11.8% y/y”.
Tajudeen Ibrahim, head of research, Chapel Hill, “11.8% inflation rate is very possible mainly due to the demand impact of the festive period on inflation.”
