Sunday, September 26, 2021

    Analysts expect inflation reverse upwards in ember months on Naira woes, electricity tariffs hikes…

    Must read

    Naija247news Editorial Team
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    Analysts expect inflation rate to reverse upwards in the coming months amid volatiile exchange rate, increase in electricity tariff and rising cost of fund.

    Despite the freshly released inflation report by the National Bureau of Statistics (NBS) showed sustained moderation in headline inflation which further declined to 17.01% (from 17.38% recorded in July).

    The fifth consecutive disinflation was chiefly driven by slower increase in core Inflation. Notably, urban and rural annual inflation rates moderated to 17.59% (from 18.01%) and 16.43% (from 16.75%) respectively in July.

    We saw core inflation rate plummet to 13.41% (from 13.72% in July) on the back of decrease in transportation fare as transport inflation moderated slightly y-o-y to 15.01% (15.06%).

    However, prices of pharmaceutical products, garments, shoes and other footwears, medical and hospital services, furniture and finishing amongst others increased y-o-y.

    Also, amid sustained high-base effect, food Index rose at a slower pace by 20.30% (compared to 21.03% recorded in July) as there were slower increases in prices of milk, cheese and egg, coffee, tea, cocoa, vegetables amongst others.

    Meanwhile, imported food index rose by 17.12% (compared to 17.06% in July) as Naira depreciated strongly against the greenback at the BDC and Parallel markets.

    As CBN stopped the sale of USD to BDCs, we saw strong dollar demand pressure at the BDC and Parallel markets.

    Hence, two months moving average foreign exchange rates at the BDC and Parrellel markets rose m-o-m by 1.39% and 1.55% to N505.37/USD and N511.31/USD in August 2021.

    On a month-to-month basis, headline inflation reversed upward to 1.02% (from 0.93%) amid a monthly jump in food inflation rate to 1.06% (from 0.86%) amid worsening insecurity.

    However, core inflation rate fell to 0.77% (from 1.31%) despite rising clothing and footwear cost (+1.12%), transport (+1.07%) and water, electricity, gas and other fuel costs (+0.83%).

    As Cowry Research expected, the headline inflation rate eased further y-o-y chiefly on reduction in core items prices.

    - Advertisement -spot_img

    More articles

    - Advertisement -spot_img

    Latest article

    WP to LinkedIn Auto Publish Powered By :