According to reports, the continued pressure on the value of the naira could result in September inflation hitting 18.14 per cent from the 17.61 per cent recorded in August, analysts at First Security Discount House (FSDH) have predicted.
The experts, in a note, said: “We expect the September 2016 inflation rate (year-on-year) to increase further to 18.14 per cent from 17.61 per cent recorded in the month of August 2016. Most of the divisions, which contribute to the headline inflation are expected to rise as a result of the continued pressure on the value of the naira.”
They stated that from data available to them, the value of the naira appreciated at the inter-bank market by 1.48 per cent while it depreciated at the parallel market by 12.32per cent in September 2016.
They also noted that the local currency gained N4.62 to close at N311.62/$ on the inter-bank market while it lost N59 to close at $479 on the parallel market.
According to the analysts: “The depreciation recorded in the exchange rate in the parallel market between the two months and higher prices in the international market would continue to put further pressure on domestic prices.”
They pointed out that the prices of most of the food items that FSDH Research monitored in September 2016 increased, with the prices of onions, tomatoes, beans, sweet potatoes, fish, vegetable oil, garri, palm oil, Irish potatoes, rice and yam rising by 51.67 per cent, 28.62 per cent, 26.19 per cent, 20.47 per cent, 13.49 per cent, 13.02 per cent, 11.43 per cent, 12.79 per cent, 10 per cent, 5.56per cent and 4.76 per cent respectively.
“The movement in the prices of food items during the month resulted in a 1.25per cent increase in our Food and Non-Alcoholic Index to 212.06 points. We also noticed increases in Clothing and Footwear; Housing, Water, Electricity, Gas & Other Fuels divisions between August and September 2016. Our model indicates that the price movements in the consumer goods and services in September 2016 would increase the Composite Consumer Price Index (CCPI) to 208.46 points, representing a month-on-month increase of 1.05per cent,” the experts stated.
Based on the data calendar on its website, the National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of September 2016 on October 15, 2016.
The NBS’ release of August inflation data, which showed that the inflation rate rose by 0.48 percentage point from 17.13per cent to 17.61per cent, indicating the slowest increase in 2016, had fuelled speculation in some quarters that September inflation would not be above 18 per cent.