(ACCESS BANK, NIGERIA) The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for May 2016 on June 18, based on the Data Release Calendar available on the Bureau’s website.
The Economic Intelligence Group forecasts headline inflation rate (year-on-year) to rise to 14.7% in May 2016 from 13.7% recorded in April 2016. Our methodology adopts an autoregressive analysis of past prices, while it recognizes all the assumptions used by the National Bureau of Statistics (NBS) in its computation of monthly composite consumer price index (CCPI).
We forecast inflation rate (year-on-year) to ascend to 14.7% from 13.7% reached in April 2016.
- The expected upward momentum in headline inflation in May reflects increases in both food and core components of inflation.
- With a 51.8% weighting in the inflation basket, the food component has been responsible for a sizeable amount of overall price pressure. Specifically, increases in the prices of cereals, fruit, meat, fish, dairy, tubers, tomatoes, and vegetables are the main culprits behind the acceleration
- The review of petrol pump price is likely to have mounted further pressure on May inflation numbers, driven by the transport component and the electricity, gas and other fuels components, which together contribute 23.2% to the CPI weighting.
- Continued weakness in the Naira, following the announcement of the deregulation of the downstream petroleum sector has also placed significant pressure on the inflation rate. This will have filtered into consumer prices as some firms may have sourced scarce foreign exchange (FX) from the parallel (black) market to import intermediate goods to maintain operations.
