- Nigeria’s Inflation Jumps to 11.44% in December
Weak capital importation amid rising capital outflow continued to weigh on Nigeria’s consumer prices in the final quarter of 2018.
The Consumer Price Index, which measures inflation rate, jumped from 11.28 percent recorded in November to 11.44 percent in December, according to the National Bureau of Statistics (NBS). Representing an increase of 0.16 percent and two consecutive increase in the headline index.
On a monthly basis, the inflation rate rose by 0.74 percent in December, again up by 0.06 percent points from the 0.80 percent filed in November.
Food index climbed from 13.30 percent in November 2018 to 13.56 percent in December. The increase in the food sub-index was attributed to rise in prices of soft drinks, Fish, Bread and Cereals, Oils and fats, Coffee, tea and cocoa, Meat, Milk, Cheese and egg, Vegetables, Potatoes, yam, and other tubers.
On a month-on-month basis, the food gauge increased by 0.81 percent, slightly down from 0.90 percent recorded in November.
The CBN has blamed the surged in consumer prices on rising capital outflow and the drop in capital importation in recent months. Suggesting that the apex bank is likely to raise interest rate from the current 14 percent to about 16 percent in order to lure foreign investors into the Nigerian economy and simultaneously curb rising inflation rate.
Capital inflow to emerging economies dropped in 2018 due to the surged in interest rates in developed economies, however, this is expected to change in 2019 as the U.S. and the rest of advanced economies slow down on rate increase.
Nigeria’s inflation is projected to rise above 12 percent in February and start moderating after the national election when calmness would have returned with clearer economic direction as stated in the 2019 economic outlook.