Inflation Rate Predicted to Inch Up

Obinna Chima

Analysts at FSDH Merchant Bank Limited have estimated that Nigeria’s consumer price index (CPI), which is used to gauge the level of inflation in the country will increase marginally in April 2015 to produce a year-on-year figure of 8.6 per cent.

The projected amount would be higher than the 8.5 per cent recorded in March 2015. The National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of April 2015 on May 18, 2015, based on the data release calendar available on the bureau’s website as at the time of this report.

The latest inflation rate for the month of March at 8.5 per cent, was higher than 8.4 per cent recorded in February 2015.

The movement in food prices at the international level, as measured by the Food and Agriculture Organisation (FAO) Food Price Index (FFPI) for the month of April 2015, showed the index averaged 171 points, 1.2 per cent lower than the revised value in March 2015, and 19.2 per cent lower than the April 2014 figure.

“Our analysis of the foreign exchange rate of the local currency indicated that the value of the naira depreciated against the dollar marginally by 0.06 per cent from $1/N199.11 by the end of March to $1/N199.23 at the end of April. The fall in the international prices of food helped to counter the effect of the depreciation in the value of the naira.

“However, we still hold the view that the effect of the devaluation in the value of the naira in the month of February 2015 is an ongoing process that will continue to trickle down and reflect in the local prices,” the FSDH report added.