By Dipo Olowookere
The inflation rate for the month of June 2020 is projected to increase to 12.45 per cent from 12.40 per cent reported for May 2020.
According to analysts at Meristem Research, this rise would be triggered by the continued rise in the prices of major food items as well as the COVID-19 pandemic, which caused a lockdown of the country’s economy.
In May 2020, the federal government slightly eased the lockdown it imposed on Lagos, Abuja and Ogun State, allowing few businesses to resume, but not at full capacity.
But in June, they were allowed to reopen fully, with strict adherence to the COVID-19 guidelines aimed to contain the spread of the disease like providing running water and soap for handwashing, hand sanitiser, observing social distancing, amongst others.
Despite the lifting of the restrictions by the government, some companies continued to operate remotely, allowing only those offering essential services to be at the office premises.
On Wednesday, July 15, 2020, the National Bureau of Statistics (NBS) is expected to release the June 2020 inflation report.
In its inflation expectation report, Meristem Research said, “We envisage an uptick in the headline inflation rate to 12.45 per cent from 12.40 per cent reported in May 2020.”
While commenting on the impact the prices of food will have on the numbers, analysts at the organisation noted that, “Although the panic purchase of food items which occasioned the announcement of lockdowns seem to have waned as restrictions were eased, we observe that food prices are still on the rise.
“Notable price increments were witnessed on maize, sorghum and rice in the month of June.
“We attribute this to the largely sticky nature of prices and the restriction on interstate movement during the month, while land borders remain shut.
“More so, data from the Central Bank of Nigeria (CBN)’s PMI report suggests an inflationary build up as input prices continue upward.
“Against this background, we expect inflation to inch higher in June.”
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