WED, AUGUST 15 2018-theG&BJournal-Nigeria’s July headline inflation extended deceleration for the eighteenth consecutive month, strengthening the view that the Central Bank of Nigeria (CBN) will keep interest rates on hold at its next review.
According to The National Bureau of Statistics (NBS) report published today, the July, headline inflation was 11.14% y/y moderating from 11.23% y/y in June. The data came in 2 bps below forecast by analysts at CORDROS Capital of 11.16% y/y and 13 bps ahead of Bloomberg compiled average estimate of 11.01% y/y. On month-on-month basis, the headline index increased by 1.13% (vs. 1.24% the previous month) – the first month-on-month decline since February 2018.
The composite food index rose by 12.85 percent in July 2018 compared to 12.98 percent in June 2018. This represents the tenth consecutive decline in year on year food inflation since September 2017. This rise in the food index was caused by increases in prices of Potatoes, yam and other tubers, Vegetables, Bread and cereals, Fish, Oils and Fat and Fruits.
On month-on-month basis, the food sub-index increased by 1.40 percent in July 2018, down by 0.17 percent points from 1.57 percent recorded in June. This represents the first-time month on month food inflation has declined since February 2018.
The average annual rate of change of the Food sub-index for the twelve-month period ending July 2018 over the previous twelve-month average was 17.10 percent, 0.65 percent points from the average annual rate of change recorded in June (17.75) percent.
Core inflation was 10.2% y/y during the review period, vs. 10.4% in June. The highest increases were reported in the prices of medical services, carpets and other floor coverings, vehicle spare parts, domestic services and household services, pharmaceutical products, paramedical services, hairdressing saloons and personal grooming establishment, dental services, motor cars and fuels and lubricants for personal transport equipment. On a m/m basis, the core index increased at a slower pace of 0.81%, 22 bps below the 1.03% reported in June.
