Nigeria’s inflation rate is expected to drop Year-on-Year (YoY) for the eighteenth month to 11.01 percent in July, FSDH has said.
The index, according to the research firm, is projected to shed 22 basis points in the review month from 11.23 percent recorded in June.
FSDH Research, it its July inflation watch report released recently, said the expected decrease in the inflation rate is largely attributable to the base effect of the previous year.
Last week, the Food Price Index (FPI) released by the Food and Agriculture Organization (FAO) showed that world food prices dropped by 3.73 percent in July 2018 from the preceding month.
The drop was the sharpest monthly decline since last December, according to the United Nations Food Agency.
Nigeria’s month-on-month food price index has been on steady rise since February 2018, increasing to 1.57 percent in June from 1.30 percent recorded in May.
FSDH believes that the general decline in the international prices of food coupled with the appreciation in the value of the Naira at the parallel market muted the prices of imported consumer goods in Nigeria between the two months under review.
“Our analysis indicates that the value of the Naira depreciated marginally at the Nigerian Autonomous Foreign Exchange (NAFEX), while it appreciated at the parallel market to end July 2018.
“The value of the Naira depreciated by 0.03% to close at US$/N361.20 at the NAFEX market while it appreciated by 0.84% at the parallel market to close at US$/N359 to end July.
“The prices of most of the food items we monitored in July 2018 moderated compared with June, while a few items recorded price appreciation. The movement in the prices of food items during the month led to a 1.18% increase in our Food and Non-Alcoholic Index.
“This Index increased year-on-year by 12.57%, up from 248.82 points recorded in July 2017. We also observed an increase in the prices of Transport and Housing, Water, Electricity, Gas & Other Fuels divisions between June and July 2018,” the report read.
According to the data release calendar of the National Bureau of Statistics (NBS), the Consumer Price Index (CPI), which measures inflation rate, for the month of July is due to be released on Wednesday, August 15, 2018.
By Oluwasegun Olakoyenikan
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