‘Inflation to drop for 17th consecutive month in June’

Nigeria’s inflation rate is expected to drop for the 17th consecutive month in June, indicating that prices of goods and services increased in June at a lower rate than the increases recorded in May.

The drop in the headline inflation, which is supported again by base year effects, would be coming close to the Sub-Saharan African average of 10 percent.

Analysts at FSDH Research, in their June inflation watch report released on Thursday, projected that the inflation rate would drop to 10.94 percent Year-on-Year in June 2018 from 11.61 percent recorded in the month of May.

Meanwhile, analysts at Financial Derivative Company (FDC) forecasted that the country’s headline inflation might likely to slip by 0.51 percent to 11.1 percent in June.

“Whilst this sounds like good news to any observer, it is noteworthy that the rate of decline in the price level has slowed significantly.

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“This is partly attributable to waning base year effects and the normalization of the inflation curve,” the analysts said in their monthly Economic Bulletin for the month of June.

The analysts, however, projected the month-on-month inflation to rise to 1.13 percent (annualized at 14.40%) after it rose to 1.09 percent in May from 0.83 percent in April.

FDC believes that the surge is driven by the increase in the price of diesel and the intensity of the herdsmen conflict in the middle belt Nigeria, causing a significant reduction in commodity output. A development which may likely halt the consistent drop in the headline inflation index.

According to them, the slide in inflation and the threat of a rebound would make the next Monetary Policy Committee (MPC) session “an interesting but difficult meeting.”

The National Bureau of Statistics (NBS) in its Data Release Calendar said it would release the country’s inflation rate for the month of June on Friday, July 13.

By Oluwasegun Olakoyenikan….

 

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