Analysts Upbeat Nigeria Inflation Will Fall Below 13%

Ahead of the Thursday release of data for consumer price index by Nigeria’s National Bureau of Statistics, economic and financial analysts have projected that the downward streak the CPI had maintained since the last 15 months, would continue in April, with the index, falling below the 13 percentage mark.

In their research, analysts at the Economic Intelligence Unit of Access Bank Plc forecast that index, which measures inflation, would ease to 12.56% in April from 13.34% in the previous month, Thisdaylive reported.

While their counterparts at FSDH Research Department of FSDH Merchant Bank predicted that the CPI would fall to 12.43%, those at Cordros Capital forecast that the rate would drop to 12.57%.

“The Economic Intelligence Group forecasts inflation rate (year-on-year) in April to sustain the downward trend started last year, easing to 12.56% compared to 13.34% in March. Our methodology adopts an autoregressive analysis of past prices, while it recognizes all the assumptions used by the National Bureau of Statistics in its computation of monthly composite consumer price index,” the Access Bank strategists noted.

They explained that looking at the drivers, research group’s analysis indicated that the slower inflation rate in April reflected a moderation in food prices and continued stability in the currency.

According to them, “Food inflation, which makes up 51.8% of the CPI basket continued its descent in April. Based on our survey, this mainly reflected declines in prices for staples such as yam and Irish potato which continue to benefit from robust supplies to the market from barns across the country as well relatively stable transport costs in the month. Processed foods such as pasta and milk also nudged slightly lower, enjoying support from stable transport prices.”

The analysts also reasoned that, “April’s easing of price pressures also reflected stability in the core index which excludes farm products and energy prices, owing to improved FX liquidity and sustained Central Bank of Nigeria interventions. At the parallel market, the Naira closed at N362/$ in the parallel market on April 30th same as a month earlier.”