…And based on expectations for the food and non-food prices, it is anticipate that the headline inflation will rise by 2.47% m/m in September
MON, SEPT 18 2023-theGBJournal |While September marks the beginning of the primary harvest season, there are obvious risks that could impede an increase in food supplies.
According to the Famine Early Warning Systems Network (FEWSNET), the North-Central and North-Eastern parts of the country experienced significant rainfall deficits in July and August, likely negatively impacting food production prospects during the harvest season.
Simultaneously, September coincides with the annual flooding experienced in the country for the past few years.
Notably, the Nigeria Hydrological Services indicated that 178 Local Government Areas (LGAs) in 32 states and the Federal Capital Territory (FCT) were in high danger of severe flooding.
The risks highlighted in combination with lingering increases in PMS prices and higher inputs to limit the gains from the harvest season.
On balance, Cordros Research forecast food inflation to rise by 2.60% m/m, translating to 30.82% y/y in September.
Cordros tells theGBJournal that they expect the pressure on non-food inflation to remain intact as existing factors stoking prices have intensified.
They noted that currency pressures have worsened as the FX demand and supply dynamics remain the same at the official and unofficial FX markets.
Consequently, Cordros forecast non-food inflation to settle at 2.24% m/m.
And based on expectations for the food and non-food prices, it is anticipated that the headline inflation will rise by 2.47% m/m in September, with the low base effects from the corresponding period of last year leading to a year-on-year print of 27.18%.
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