Analysts see Nigeria’s inflation rate rising in Nov, Dec

Amid the steady decline in headline inflation rates over the past few months, analysts have predicted an uptrend for the last two months of the year as the festive season approaches.

The media had recently reported that the inflation rate fell to 15.99 per cent in October from 16.36 per cent the previous month. The country has seen a steady decline in inflation since April, when it peaked at 18.12 per cent.

Analysts at CSL Stockbrokers, in a note seen by our correspondent, said, “Looking ahead, we project inflation will maintain its descent throughout the year, supported by the high base in the prior period. The government sets 13 per cent as the inflation target for 2022.

“However, as we approach the festive season, considering expectations of increased demand, we expect an increase in monthly inflation reading for the last two months of the year.”

Analysts at Cordros Capital said given the lower-than-expected food supplies to the market in line with the below-average primary harvest season, food prices would increase this month.

They said, “In addition, we expect the upward pressures on food prices to be magnified by the increased demand for food items as the people prepare for the year-end festive season.

“Accordingly, we expect the farm produce basket to influence the uptrend in food inflation in November. Consequently, we forecast food inflation will increase by 16 basis points to 1.07 per cent month on month. Accordingly, we expect the core inflation to rise by 0.91 per cent month on month in November.”

CSL Stockbrokers analysts blamed the inflationary pressures on the food supply chain disruptions caused by the pandemic and insecurity.

According to them, the reopening of the land borders has not contributed to a drop in food prices as trade flows have yet to resume to pre-border closure levels.