The consumer price index (CPI), which is used to gauge inflation in the country may increase further year-on-year to 17.71 per cent in August 2016, from the 17.13 per cent recorded in July 2016.
Analysts at FSDH Merchant Bank stated this in their latest inflation forecast, noting that they expect the increase to come from the increase in the prices of food items and other non-food items as a result of the continued pressure on the value of the naira.
The National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of August 2016 this week based on the data calendar on its website.
According to the report, the prices of food items that FSDH Research monitored in August 2016 moved in varied directions. For instance, it showed that prices of onions, palm oil, fish, rice and vegetable oil were up by 86.11 per cent, 16.2 per cent, 13.06 per cent, 10.74 per cent and 4.35 per cent while the price of tomatoes, yam, sweet potatoes, Irish potatoes and garri fell by 57.11 per cent, 13.33 per cent, 8.33 per cent, 5.56 per cent and 2.38 per cent.
“Meanwhile, the price of beans and meat remained unchanged. The movement in the prices of food items during the month resulted in a 1.10 per cent increase in our Food and Non-Alcoholic Index to 209.33 points. We also noticed increases in Clothing and Footwear; Housing, Water, Electricity, Gas and other fuels divisions between July and August 2016.
“Our model indicates that the price movements in the consumer goods and services in August 2016 would increase the CCPI to 206.46 points, representing a month-on-month increase of 1.09 per cent. We estimate that the increase in the CCPI in August will produce an inflation rate of 17.71 per cent,” it added.
The Food Price Index (FPI) that the Food and Agriculture Organisation (FAO) released recently showed that the FPI increased in August to a 15-month high. The Index was up by 1.95 per cent compared with July, as most commodity prices rose in August led by dairy, oils and sugar.
The value of the Index in August was the highest since May 2015. The FAO Dairy Index appreciated by 8.63% from July as prices of cheese, whole milk powder and butter were on the increase.