Analysts Predict Higher Inflation Figure for February

Obinna Chima

The consumer price index (CPI), the basket used in gauging inflation in Nigeria will rise to 8.3 per cent in February 2015, higher than the 8.2 per cent recorded in January, analysts at FSDH Merchant Bank Limited have predicted.

The National Bureau of Statistics (NBS) is expected to release the inflation figure for the month of February 2015 on March 17, 2015, based on the data available on the bureau’s website.

The latest inflation rate for the month of January 2015 of 8.2 per cent, was higher than the eight per cent recorded in The report by FSDH Merchant Bank also revealed that food prices at the international level, as measured by the Food and Agriculture Organisation (FAO) Food Price Index (FFPI) declined in February 2015, compared with January 2015 figures.

The Index has been on a declining path since April 2014 and has now reached its lowest value since July 2010. The FFPI averaged 179.4 points, one per cent lower than the revised value in January and 14 per cent lower than the February 2014 figure.

According to the FAO, prices of cereals, meat and especially sugar dipped last month, the price of oils remained stable while the prices of dairy products rebounded sharply.

“Our analysis of the foreign exchange rate of the local currency indicated that the value of the naira depreciated against the dollar by 15.15 per cent from $/N168 in January to $/N198 at the end of February due to the closure of the Central Bank of Nigeria’s Retail/Wholesale Dutch Auction System (rDAS/wDAS) foreign exchange window.

“The fall in the international prices of food helped to counter the effect of the depreciation in the naira. In addition, the local prices have not reflected the effect of the currency depreciation because of delayed effect,”

Furthermore, an analysis of the average prices of a basket of consumer goods selected from across the country monitored by the FSDH Research in February 2015 showed that there was a general decrease in the prices of essential food items during the period.

“Food items such as rice, tomatoes, onions, Irish potatoes, vegetable oil, garri, sweet potatoes and fish recorded decreases of 2.56 per cent, 14.48 per cent, 38.96 per cent, 14.44 per cent, 2.89 per cent, 3.70 per cent, 4.76 per cent and 7.84 per cent respectively.