FRI, 12 AUGUST 2016-The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for July 2016 on August 31 and forecast is that the figure is still fast heading north.
Analysts at Access Bank intelligence group forecast inflation rate (year-on-year) to ascend to 17.2% from 16.5% reached in June 2016.
“The expected upward momentum in headline inflation in July reflects increases in both food and core components of inflation,” the intelligent group said.
Prices and services have been on the rise since the beginning of 2016 pressured also by the weak currency, (NAIRA-N314.75k/$). The food component which has the largest weighting in the inflation basket will be responsible for a substantial amount of the overall price pressure. The uptick in prices from items such as fish, meat, vegetables and bread on the back of higher transportation and distribution cost will push inflation rate for the month of July higher, the group said.
They also expect the core index to also inch up slightly due to cost push factors on the back of continued depreciation of the Naira. The local currency depreciated more than 28% against the green back in the interbank and parallel market over the levels in June.
“The pass-through effect will be seen in the prices of imported items such as motor car and vehicle spare parts. Increases in cost of passenger transport by air will further drive the core index higher. The nation’s reliance on imports of raw materials, refined products and consumer goods implies that a weaker Naira will compound the effect of imported inflation.”
