- This shows Nigeria’s inflation hits all time high in 18 years
[Reuters] Nigeria’s annual inflation rate ballooned to 25.8% in August, official data from the National Bureau of Statistics has shown.
The figures released by NBS on Friday indicates a high in inflation rate for the Africa’s largest economy in close to two decades.
Investors will be expectant as the Central Bank of Nigeria (CBN) is set to release its interest rate decision later this month.
The August inflation figure rose for an eighth straight month from July’s 24.08%, compounding a cost-of-living crisis worsened by President Bola Tinubu‘s reforms.
The last time Nigerians experienced this level of inflation was in August 2005, official data shows.
“Nigerian inflation rose faster than expected in August, a month that more typically sees seasonally subdued inflation pressures,” said Razia Khan, Standard Chartered managing director and chief economist, Africa and Middle East, told Reuters.
Economic analysts said naira depreciation, higher fuel and food prices, logistics costs and money supply growth, were some of the major drivers of Nigeria’s inflation.
“The inflation data in our view reflects only in part the lifting of the subsidy. Much of the pre-existing pressure came from Nigeria’s monetary policy stance in the months that preceded this outcome, and the continued naira depreciation on the parallel market,” Khan said.
The central bank raised rates by a smaller-than-expected 25 basis points in July, contrary to analysts’ expectations. It is due to set rates again on Sept. 26 and some analysts expect a more hawkish stance.
Food inflation, which accounts for the bulk of Nigeria’s inflation basket, rose to 29.34% in August from 26.98% in July, as price of staples rise, the NBS said.
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