By Aduragbemi Omiyale
The inflation rate in Nigeria will moderate to 16.89 per cent in August 2021 from the 17.38 per cent reported in July 2021, analysts at Meristem Research have projected.
The decline in the headline August inflation will be propelled by a decline in the prices of food items at the market in the month under review, they noted.
“The harvest of major food items like yam, maize, beans, crude palm oil and vegetables began in August. The improvement in supply should translate into lower pressures on the prices of these items,” the analysts said in a report obtained by Business Post.
They further said the decline in inflation would further be supported by “a moderation in the prices of other food items like eggs as the prices of animal feeds begin to moderate.”
For the past four months, the National Bureau of Statistics (NBS) has said the rate of inflation has slowed, though many Nigerians disagree with these figures because they feel the prices of food items at the market are indicating otherwise.
The stats office computes its numbers focusing on certain items and services on its basket and it compares the rise in the selected items with the same period of last year.
According to the NBS, “The first stage in the calculation of the CPI is the collection of prices on each item (740 goods and services) from outlets in each sector (rural or urban) for each state. Prices are then averaged for each item per sector across the state. The next step is to use the average price to calculate the basic index for each commodity: The current year price of each commodity is compared with a base year’s price to obtain a relative price.”
Meristem, in its report, stated that, “Given the high base last year and our opinion concerning increased supply in August, we anticipate slower growth in the food inflation index, translating to a further moderation in the inflation rate.”
“We, however, note the increased cases of insecurity in the food-producing regions as potential risks to our projection.
“On core inflation, exchange rate volatility in the parallel market during the month of August should influence the uptick in the core inflation index. Hence, we expect the headline inflation index to rise by 16.89 per cent year-on-year in August 2021,” it said.
