Inflation eases to 16.05% in July, aided by FX stability

267 Views
Latest data from the National Bureau of Statistics (NBS) on Consumer Price Index (CPI) for July 2017 showed a further drop in the rate to 16.05% year-on-year (YoY). The headline inflation index released on Monday…
 The moderate dip in July’s CPI was largely impacted by effect of easing on the prices of imported items as well as base year effect over prices as at 2016 comparable period…
Amongst the CPI categories, the Food sub-index moved up rapidly to 20.28% (YoY), 37 basis points higher than 19.91% reported in June. This represents the highest YoY increase in food inflation since the beginning of the new series…
 Meanwhile, on a MoM basis, the Headline index dropped by 1.21% in July, and was 37 basis points lower than June’s 1.58%, indicating a second month respite in price uptick...
 
 …Our take
Though July’s CPI reading was 35 basis points above our forecast of 15.70% in June’s review, but accommodated our assumptions of rising food pressure as a result of off-harvest season and base year effect…
The biggest decelerator of the inflation number was the core index. The core inflation declined by 30 basis points to 12.20%, largely on the strengthening of the Naira over US Dollar in the period under consideration…
 A closer scrutiny of NBS release on Selected Food Prices Watch for the month of July showed that out of twenty-five (25) essential food items covered, fifteen (15) had varied price declines from June’s closing positions…
 The recent sluggish dip in the inflation rate will likely leave the monetary authority with no option than to uphold existing rates at the next scheduled meeting…
Inflation Outlook for August: We project August inflation to be at the region of 16.02 – 16.07%. This is based on recent pressure in the prices of food items at the global market as well as unsettled pressure on the FX…

 Kindly click here to download the CPI July 2017 report.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *