“Will inflationary pressures make an unwelcome return in Nigeria during the final trading quarter?”
This was the question on the minds of many investors after inflation rose marginally 11.28% YoY in September from 11.23% the previous month, said a Research Analyst at FXTM, Lukman Otunuga, in his comments on the Nigeria Inflation Report released on Tuesday.
Recall, the National Bureau of Statistics on Tuesday released the Consumer Price Index, which measures inflation, with the rate rising from 11.23 per cent in August to 11.28 per cent in September 2018.
This is the second consecutive rise in headline inflation after 18 consecutive months of decline in the rate.
“The Consumer Price Index, which measures inflation, increased by 11.28 per cent year-on-year in September 2018. This is 0.05 per cent points higher than the rate recorded in August 2018 at 11.23 per cent,” the NBS said in the inflation report.
It stated that on a month-on-month basis, the headline index increased by 0.84 per cent in September, down by 0.21 per cent points from the rate recorded in August, which was 1.05 per cent.
The bureau said the percentage change in the average composite CPI for the 12-month period ending September 2018 over the average of the CPI for the previous 12 months was 13.16 per cent, a difference of 0.39 per cent from the 13.55 per cent recorded in August.
It said the urban inflation rate increased by 11.7 per cent year-on-year in September, from 11.67 per cent recorded the previous month.
“The rural inflation rate increased by 10.92 per cent in September 2018 from 10.84 per cent in August 2018,” the bureau added.
On a month-on-month basis, it stated that the urban index rose by 0.86 per cent in September, down by 0.14 from one per cent recorded in August, while the rural index also rose by 0.82 per cent in September, down by 0.14 per cent from the rate of 0.96 per cent recorded in August.
“The corresponding 12-month year-on-year average percentage change for the urban index is 13.58 per cent in September 2018. This is less than 13.95 per cent reported in August 2018, while the corresponding rural inflation rate in September 2018 is 12.80 per cent compared to 13.21 per cent recorded in August 2018,” the NBS added.
It said the composite food index rose by 13.31 per cent in September, compared to 13.16 per cent in August.
Commenting on this, Otunuga, said in a statement available to TechEconomy.ng that, “With consumer prices rising for the second consecutive month after 18 months of steady declines, concerns may heighten over inflation edging away from the Central Bank of Nigeria’s 6-9% target.
“Market expectations over an interest rate cut anytime soon are likely to diminish further following today’s inflation report.
“The combination of rising inflation, uncertainty ahead of the 2019 elections, global trade tensions and U.S. rate hike expectations are all likely factors to force the CBN to remain status quo this quarter.