Inflation drops to 12-month low of 15.40%

Inflation in Nigeria dropped by 60 basis points to 15.40 per cent, the lowest level in 12 months, the National Bureau of Statistics has said.

Specifically, food inflation moderated by 1.09 percentage points (ppts) year-on-year (YoY) to 17.21 percent owing to the supportive base effect.

But the core inflation was up by 61 bps, reflecting continued price pressure on cooking gas.

The NBS said that the annual inflation rate dropped for the seventh consecutive month to 15.4 per cent in November from 15.99 per cent in October. This represents a cumulative 2.77 percentage point decline since March when the inflation rate peaked at 18.17 per cent.

In its Consumer Price Index report for November 2021, the NBS stated: “Consumer Price Index, (CPI) which measures inflation increased by 15.40 per cent (year-on-year) in November 2021. This is 0.51 per cent points higher than the rate recorded in November 2020 (14.89) percent. Increases were recorded in all COICOP divisions that yielded the headline index.”

On month-on-month basis, the Headline index increased by 1.08 percent in November 2021, about 0.10 percent rate higher than the 0.98 percent recorded in October 2021. NBS stated further: “The percentage change in the average composite CPI for the twelve months period ending November 2021 over the average of the CPI for the previous twelve months period was 16.98 percent, showing 0.02 percent point increase from 16.96 per cent recorded in October 2021.”

“The urban inflation rate increased by 15.92 percent (year-on-year) in November 2021 from 15.47 percent recorded in November 2020, while the rural inflation rate increased by 14.89 percent in November 2021 from 14.33 percent in November 2020.”

 

Noting that the November inflation reading was at par with their projection but 10 bps higher than Bloomberg’s consensus estimate of 15.30 percent, economists at CardinalStone Partners, a Lagos based investment house, said, “We project a further moderation in headline inflation to 14.85 percent YoY in December 2021 on the sustained impact of the base effect.

 

“However, we expect festivity induced demand to remain evident on MoM inflationary reading.