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Nigerian Inflation Surges More Than Expected to 18-Year High - BLOOMBERG
BY , Bloomberg News
A trader displays her wares at Yaba market in Lagos, Nigeria, on Monday, July 17, 2023. Nigeria’s monthly inflation rate soared to a seven-year high in June, after President Bola Tinubu scrapped fuel subsidies and allowed the currency to weaken before declaring a state of emergency to control staple food costs. , Bloomberg
(Bloomberg) -- Nigeria’s inflation rate jumped to a more than 18-year high on rising energy and food prices, increasing the odds of a rate hike this month.
Consumer prices climbed an annual 25.8% in August, compared with 24.1% the previous month, according to data published on the National Bureau of Statistics’ website on Friday. That’s the highest level since August 2005 and above the 25% median estimate of eight economists in a Bloomberg survey. Prices rose 3.2% month-on-month.
Annual food inflation quickened to 29% in August from 27% a month earlier and core price growth, which excludes farm produce and energy costs, accelerated to 21% from 20.5%.
The acceleration continues to be fanned by the removal of costly fuel subsides in May, security issues in Nigeria’s food producing regions, and a 40% depreciation in the naira against the dollar since the authorities allowed the local unit to float more freely in June.
The currency weakness and second round effects on inflation from the subsidy removal may persuade the central bank’s monetary policy committee to raise interest rates at its Sept. 25-26 meeting for an unprecedented ninth consecutive time.
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Acting Governor Folashodun Shonubi said at the previous MPC meeting that not tackling “inordinate inflation, with implications for future expectations, constitutes a greater danger to overall domestic stability” than constraining economic growth.
The MPC has lifted rates by 725 basis points since May 2022 to 18.75% to combat inflation that’s exceeded the top end of its 6% to 9% target range for more than eight years.
--With assistance from Simbarashe Gumbo.
