Inflation at highest level in 18 years

The rising costs of foodstuffs, energy logistics, and other living items have pushed Nigeria’s headline inflation rate to its highest level in 18 years.

Economic intelligence reports by many finance and economic firms surveyed by Checkout Magazine yesterday indicated that inflation may rise by more than 100 basis points to above 25 per cent, the eighth consecutive monthly increase and the highest since August 2005.

Ahead of the release of the official inflation report by the National Bureau of Statistics (NBS), independent consumer surveys and econometric models indicated that inflation remained on an upward trend.

Analysts were unanimous that the inflation rate remains elevated, although the projections differ slightly. On average, inflation is expected to increase from 24.08 per cent in July to about 25.5 per cent in August.

Financial Derivatives Company (FDC), a leading independent economic and finance research firm, stated that its independent market surveys showed that headline inflation may rise to 25.47 per cent.

Cordros Capital said it expected inflation to rise by about 150 basis points to 25.7 per cent in August 2023, as “existing factors stoking upward price pressures” are expected to “remain intact over the short term”.

Experts at Cordros Capital said the lean season in food-producing states would also likely widen the food demand-supply gap further.

United Capital said consumer prices will remain under substantial pressure in the second half of 2023, with inflation projected to average 25.1 per cent for the entire year, marking the highest annual rate since the 1990s.

“The contributory factors to inflation in Nigeria remain the same. Prominent among these factors are naira depreciation, higher logistics costs, money supply growth, and cost-push variables,” FDC stated.

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