Meristem Analysts See January 2024 Inflation at 29.54%

By Aduragbemi Omiyale

Inflation in January 2024 in Nigeria is predicted to rise by 0.62 per cent to 29.54 per cent from the 28.92 per cent recorded in December 2023, according to analysts at Meristem Research.

They noted that this rise would be influenced by the continuous rise in the prices of food, as well as the effect of the weakening of the Naira against the Dollar in the foreign exchange (FX) market.

In December 2023, inflation rose for the 13th consecutive month, with food inflation soaring by 33.93 per cent on a year-on-year basis and core inflation increasing by 23.07 per cent.

Food prices have continued to go beyond the reach of consumers due to the forex crisis and insecurity in the northern part of the country, where most of the food items come from.

Farmers have been unable to go to work because bandits and kidnappers are in charge, demanding taxes for planting and harvesting if farmers must go to their farms or risk being killed.

“For January, we anticipate food inflation to continue its upward trend as the underlying drivers of the surge in food prices remain unabated.

“Our market price survey revealed increases in the prices of pasta, noodles, rice, oils, and other essential food staples, supporting our projection of higher food inflation,” a part of the report obtained by Business Post read.

The firm further stated that, “We envisage a rise in core inflation in January. This expectation is based on the continued depreciation of the Naira observed in January, which is expected to impact the prices of imported goods. The Naira depreciated by 25.12 per cent on the NAFEM window, crossing N1500/USD in January 2024.

“Hence, we project a sustained uptrend in the country’s headline inflation for the month. Given the high base effect of January 2023, we expect that the pace of increase will be low. However, the peculiarities in January (mentioned above) would likely prevent a disinflation due to the base effect.”

Meristem then said it expects the headline inflation in January 2024 to jump by 29.54 per cent versus 28.92 per cent in December 2023, the food inflation to rise by 34.88 per cent versus 33.93 per cent in December 2023, and the core inflation to increase by 23.19 per cent versus 23.07 per cent in December 2023.

The National Bureau of Statistics (NBS) is expected to release the inflation numbers for last month on Thursday, February 15, 2024.