Analysts Projects Further Ease in Nigeria’s August Inflation to 32.40%

By Aduragbemi Omiyale

The inflation rate in Nigeria for August 2024 should marginally moderate by 1.00 per cent on a month-on-month basis to 32.40 per cent from the 33.40 per cent recorded in July 2024, analysts at Meristem Research have predicted.

Last month, the National Bureau of Statistics (NBS) said the average prices of goods and services in the country eased for the first time in 18 months as a result of a slight improvement in food supply due to the harvest season.

The agency is expected to release the numbers for last month in the coming days, and for those at Meristem Research, the rise in the price of premium motor spirit (PMS), otherwise known as petrol, may not cause another jump in inflation despite consumers unable to purchase the product with ease in the period under review.

In September 2024, the Nigerian National Petroleum Company (NNPC) Limited unofficially increased the pump price from N568 per litre to N855 per litre, while some independent oil marketers sell between N1,000 per litre and N1,200 per litre in Lagos.

In a note obtained by Business Post, Meristem Research said the slight decline in inflation for last month would be driven by “continued supply of the staple food and a high base effect from last year.

“We anticipate a moderation in headline inflation in August 2024, driven primarily by the high base effect from August 2023.

“Additionally, food inflation is anticipated to decline, hinged on the continued supply of the staple food mentioned earlier.

“In the same vein, we anticipate a slight fall in the core index for August 2024, also tied to the high base effect from the prior period.

“Furthermore, the relative stability of the Naira during the month (the naira depreciated by 0.90 per cent MoM compared to 6.87 per cent MoM in July) supports this outlook.

“Overall, we anticipate a further decline in the August 2024 inflation rate driven by the aforementioned factors,” parts of the note stated.

The firm said it expects the headline inflation at 32.40 per cent versus 33.40 per cent in July 2024, food inflation at 37.92 per cent versus 39.53 per cent in June 2024, and core inflation at 26.53 per cent versus 27.47 per cent in June 2024.