New Telegraph

February 26, 2024

FDC Forecasts 27.5% Inflation For November

Nigeria’s headline inflation may likely rose marginally to 27.5 percent in November from 27.33 per cent in October, Financial Derivatives Company (FDC) has said. In a report released yesterday ahead of the expected publication of the November inflation report by the National Bureau of Statistics (NBS) next Friday, the firm also predicted that food inflation will increase to 31.80per cent, while core inflation will rise to 22.72 per cent.

The FDC said: “Even though this is a mild increase, it will be an 18year peak,” adding that “seasonal factors and cost pressures are manifesting in higher prices compared to the same period in 2022.” According to the firm, “what is apparent from the forecast is that the rate of increase in the general price level is beginning to show signs of slowing.

The more relevant data point is the month-month inflation, which is projected to be 1.54 percent (annualised at 20.23%), a decline from 1.73 per cent (annualised at 22.79%) in October. “The fact that headline inflation is slowing and monthly inflation is declining will suggest that inflation is probably approaching a point of inflection. This may mean that the budgetary goal of 21.4 percent headline inflation in 2024 may not be an unrealistic target.

The above notwithstanding, the inflation rate is still 19 per cent above the upper band of the CBN target. The CBN governor has reiterated the determination of the CBN to focus primarily on the goal of price stability.” Analysts note that if the FDC’s prediction proves accurate, it would mark the 11th consecutive increase in the country’s headline inflation rate.

In its Consumer Price Index (CPI) report for October, the NBS said that the costs of food items and others resulted in inflation increasing by 0.61 percent to 27.33 per cent in October compared to 26.72 per cent in the preceding month.

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