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Inflation drops for eight consecutive months

Inflation rate has dropped to 15.98 per cent in September from the 16.01 per cent recorded in August 2017.

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This latest decline is the eighth consecutive decline in the rate of headline year on year inflation since January 2017. 

The Consumer Price Index (CPI) released yesterday by the National Bureau of Statistics (NBS) indicated that the latest inflation rate is 0.03 per cent points lower than the rate recorded in August.

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Analysis of the report showed that increases were recorded in all COICOP divisions that yield the Headline Index. 

On a month-on-month basis, the Headline index increased by 0.78 per cent in September 2017, 0.19 per cent points lower from the rate of 0.97percent recorded in August. 

The report showed that the percentage change in the average composite CPI for the twelve-month period ending in September2017 over the average of the CPI for the previous twelve-month period was 17.17 per cent, showing 0.16 per cent point lower from 17.33 per cent recorded in August 2017.  

Expert at the financial derivative said: “Fundamentally, inflation in Nigeria is moderating, but could swing upwards if there is a surge in money supply and wages increase sharply. So far in 2017, M2 has contracted by 11.06% but the velocity of circulation has increased.

The harvest season has also begun and is expected to increase supply and moderate prices. However, cost-push factors such as diesel (N200 per litre) continue to increase costs.

FXTM Research Analyst,  Lukman Otunuga said: “as the nation continued to recover from an economic recession. With consumer prices stabilising, the central Bank of Nigeria could be offered a pass to cut benchmark interest rates, as inflationary pressures become a diminishing theme.

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