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The FSDH Research expects the December 2018 inflation rate (year-on-year) to rise to 11.69 per cent from 11.28 per cent recorded in November.
In the research by the FSDH Merchant Bank Limited on ‘A spike in inflation rate – Any monetary policy response?’ which was obtained on Tuesday, this represents a monthly increase of 0.41 per cent between the two months and the highest monthly increase since November 2016.
It stated that the expected increase in the inflation rate would reflect higher price increases within the food and non-alcoholic beverages division and other non-food items, due to end-of-year and festivity purchases.
According to the report, the National Bureau of Statistics is expected to release the inflation rate for the month of December on Thursday, 17 January 2019, ahead of the Monetary Policy Committee meeting scheduled for 21-22 January 2019.
The Food Price Index reported that the Food and Agriculture Organisation published for the month of December 2018 remained relatively the same as November 2018.
However, it noted, the World Bank had hinted about a possible increase in food prices in 2019 because of severe weather conditions. This may accelerate the inflation rate in 2019 in Nigeria.
According to the report, the FAO noted that the decline in the prices of dairy and sugar in December was largely offset by the increases in cereal, meat and oils.
Rising domestic and global demand in major producing countries coupled with weather concerns reflected on the rising prices of cereal, oils and meat, it added.
On the flip side, sugar and dairy prices fell, supported by increased export supplies from India/Brazil and New Zealand respectively.
It added that falling international prices of crude oil also contributed to the decrease in sugar prices as lower energy prices tended to reduce the use of sugarcane to produce ethanol, leading to more supplies for sugar production.
The FSDH Research’s analysis indicated that the value of the Naira depreciated at the Nigerian Autonomous Foreign Exchange in December 2018, while it appreciated at the parallel market. – Punch
– Jan. 16, 2019 @ 18:47 GMT |
Tags: FSDH expects December inflation to rise to 11.28%
