By Dipo Olowookere
Lagos-based investment banking firm, FSDH Research, has predicted that the year-on-year inflation rate in Nigeria will marginally increase to 11.28 percent from 11.26 percent in the November 2018.
The National Bureau of Statistics (NBS) is due to release the inflation rate for the month of November on Thursday, December 13, 2018.
Inflation for the month of October 2018 dropped to 11.26 percent after two consecutive months of increase.
A report released by FSDH Research last Thursday said the Food Price Index (FPI) report the Food and Agriculture Organization (FAO) published for the month of November 2018 noted that food prices in the international market further declined from the October levels.
The FPI recorded the lowest figure since May 2016. Weaker prices in vegetable oil, dairy, cereal and meat depressed the values of the Index, while the sugar prices firmed up. Increased exports supplies from the main producing regions impacted the prices of most commodities.
On the other hand, sugar prices increased for the third consecutive month due to low production prospects in the major sugar producing regions.
FSDH Research’s analysis indicates that in November 2018 the value of the Naira depreciated at both the Nigerian Autonomous Foreign Exchange (NAFEX), and the parallel market. The value of the Naira depreciated by 0.21 percent at the NAFEX market to close at N364.16/$ from N363.40/$ in October, while it lost 0.96 percent in the parallel market to close at N365.50/$ from N362.00/$ in October 2018.
The lower prices of consumer goods in the international market moderated the pass through effect of the depreciation in the foreign exchange rate on domestic prices.
The prices of food items that FSDH Research monitored in November 2018 moved in varying directions, leading to 0.90 percent increase in our Food and Non-Alcoholic Index. This Index increased year-on-year by 13.24 percent to 292.44 points, up from 258.24 points recorded in November 2017.
FSDH Research also observed an increase in the prices of Transport and Housing, Water, Electricity, Gas & Other Fuels divisions between October and November 2018, estimating that the increase in the Composite Consumer Price Index (CCPI) in November would produce an inflation rate of 11.28 percent.
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