Yuletide spending pushed inflation to 11.44% in Dec – NBS

Harboursandport.com: Lagos --- Spending during the yuletide season pushed up inflation rate to 11.44 per cent in December from 11.28 per cent recorded in November 2018, the National Bureau of Statistics (NBS) has said.

The consumer price index (CPI) which measures inflation released, yesterday, by the NBS showed that  December inflation rate was 0.16 percentage points higher than the rate recorded in November 2018 (11.28 percent).

Nigerians shopping for Christmas

On month-on-month basis, the Headline index increased by 0.74 percent in December 2018, up by 0.06 percent points from the rate recorded in November 2018 (0.80) percent.

https://www.dailytrust.com.ng/yuletide-spending-pushed-inflation-to-11-44-in-dec-nbs.html

The percentage change in the average composite CPI for the 12 months period ending December 2018 over the average of the CPI for the previous 12 months period was 12.10 percent, showing 0.31 percent point from 12.41 percent recorded in November 2018.

The urban inflation rate increased by 11.73 percent (year-on-year) in December 2018 from 11.61 percent recorded in November 2018, while the rural inflation rate increased by 11.18 percent in December 2018 from 10.99 percent in November 2018.

On a month-on-month basis, the urban index rose by 0.76 percent in December 2018, down by 0.07 from 0.83 percent recorded in November 2018, while the rural index also rose by 0.72 percent in December 2018, down by 0.06 percent from the rate recorded in November 2018 (0.78 percent).

Analysts at Cordros have noted that whilst the core basket was largely unchanged from the November reading at 9.8% y/y, food inflation notched higher by 26bps to 13.56% y/y on the back of an increase across farm produce (+33bps to 13.03% y/y) and imported food (+11bps to 15.66% y/y), both of which masked the moderation in processed food (-98bps to 24.84% y/y).

“With minimum wage still hanging in the air, we expect the dual impact of slight uptick in core inflation and faster deceleration in food basket to midwife a reversal in the headline inflation trend in January,” they said.

The analysts posit that, on account of a steeper decline in demand for farm produce following the end of the festive season, they expect m/m food inflation to moderate slightly by 2bps to 0.79%.

However, whilst they expect FX to remain largely range-bound, together with tamed energy prices, they see scope for mild uptick in the m/m core inflation (+15bps to 0.65% m/m) as election related spending intensifies.

The analysts said: “Overall, we look for January m/m headline inflation of 0.73%, translating to y/y figure of 11.37%.

“Further out, we reiterate the (1) implementation of the new minimum wage, (2), currency devaluation, as well as (3) PMS and electricity price hikes, as notable upside risks to inflation in 2019, with year-end forecast of 13.55% y/y.”