Analysts predict rise in inflation rate - THE NATION
BY Collins Nweze
THE Financial Derivatives Company Limited has predicted a jump in headline inflation by 0.25 per cent to 12.10 per cent for December.
In a report released at the weekend, the investment and research firm said if the prediction becomes accurate, it will be the fourth consecutive month that headline inflation has increased.
The last time this happened was in 2016 when the economy suffered from a severe growth contraction leading to a recession. In recent times, the spike in the year-on-year headline inflation is largely due to money supply saturation, lower interest rates, increased seasonal demand and base year effects of the border closure.
Also, the month-on-month inflation is likely to decline to 0.97 per cent (12.25 per cent annualised). This means that Nigerians are probably bypassing the border closure. But more disturbing is the fact that core inflation (inflation less seasonalities) is expected to increase again to 9.2 per cent.
Nigeria’s inflation rate jumped to 11.85 per cent (year-on-year) in November 2019, representing 0.24 per cent points higher than the rate recorded in October 2019.
According to the NBS report, “increases were recorded in all Classification of Individual Consumption According to Purpose (COICOP) divisions that yielded the headline index.
“On a month-on-month basis, the headline index increased by 1.02 per cent in November 2019, this is 0.05 per cent rate lower than the rate recorded in October 2019 at 1.07 per cent.
“The percentage change in the average composite CPI for the 12 months period ending November 2019 over the average of the CPI for the previous 12 months period was 11.35%, representing a 0.05 per cent point from 11.30 per cent recorded in October 2019.”