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Friday, October 16,
2020 10:59 AM / by FBNQuest Research / Header Image
Credit: Bloomberg
Headline
inflation accelerated again in September to 13.71% y/y from 13.22% the previous
month. (Our expectation, shared with the newswires, was a little changed rate
of 13.30% with a positive harvest impact.) Food price inflation quickened from
16.00% y/y to 16.66%. The core (non-food) measure ticked up from 10.52% y/y to
10.58% according to the NBS report.
The
report shows m/m increases of 1.2% for both the transport and health components
of the basket, compared with 0.9% for the core measure. The bureau's commentary
singles out above-average price increases for several items that reflect the
impact of life with Covid-19, including medical and hospital services,
pharmaceuticals, and passenger transport.
Anecdotal
evidence points to positives from the main harvest in the next report (for
October). Such were outweighed in the current report by the usual constraints
(insecurity, herder/farmer clashes and poor roads to market). That food price
inflation has accelerated beyond the measure for imported food (see chart)
points to the scale of these constraints.
Consumer price inflation (% chg y/y) |
|
Sources:
National Bureau of Statistics (NBS); FBNQuest Research |
The NBS
reports include data by state. The headline rate in September was highest in
Bauchi at 3.4% m/m and lowest in Ondo at 0.3%. The bureau cautions that the
basket varies from state to state.
This
latest increase makes further monetary easing less likely.
Our call
is that the headline rate will be a little lower in October due to a modest
harvest impact, at 13.4% y/y.
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