- Inflationary Pressure Expected to Ease Further
The expected marginal decline in the inflation rate was premised on slower increase in the food and non-food divisions, compared with the previous month.
Based on the data release calendar on the website of the National Bureau of Statistics (NBS), the bureau is expected to release the inflation rate for October 2017 on November 18, 2017.
The monthly Food Price Index (FPI) that the Food and Agriculture Organisation (FAO) released recently showed that the Index averaged 176.4 points, 1.26 per cent lower than the revised value for September 2017, but 2.45 per cent higher than the October 2016 figure. According to the FAO, all categories of commodities used in the calculation of the Index dropped in value with the exception of cereal.
The FAO Dairy Index fell by 4.19 per cent from September 2017 as the prices of butter, skim milk powder (SMP) and whole milk powder (WMP) eased in October.
Also, analysis by FSDH Merchant Bank indicated that the value of the naira depreciated on the interbank market, while it appreciated on the parallel market.
Precisely, the naira lost by 0.02 per cent on the interbank market to close at US$/N305.80 while it gained 0.83 per cent on the parallel market to close at US$/N362.50 at the end of October.
“The naira appreciation in the parallel market and the drop in the prices of food at the international market led to a drop in the prices of some consumer goods in Nigeria.
“The prices of most of the food items we monitored in October 2017 moderated downwards, while a few items recorded price appreciation.
“The movement in the prices of food items during the month resulted in 0.85 per cent increase in our Food and Non-Alcoholic Index to 256 points.
“Our Food and Non-Alcoholic Index increased by 20.24% from 212.90 points in October 2016. We also noticed increase in the prices of Housing, Water, Electricity, Gas & Other Fuels divisions between September 2017 and October 2017,” the bank stated.
Furthermore, it revealed in a report that itmodel indicated that the general price movement in the consumer goods and services in October 2017 increased the Composite Consumer Price Index (CCPI) to 243.04 points, representing a month-on-month increase of 0.77 per cent.
“We estimate that the increase in the CCPI in October 2017 would produce an inflation rate of 15.91 per cent marginally lower than the 15.98 per cent recorded in September 2017,” it added.