No let-up in Inflationary Surge; Records Fifth Successive Acceleration

Proshare

Tuesday, July 19, 2016 9:30AM /FBNQuest Research

The latest inflation report from the NBS shows the fifth successive acceleration in the headline rate to 16.5% y/y in June from 15.6% the previous month. Our own contribution to wire service polls of analysts was a rate of 16.2% y/y. There was a steep increase in the core measure to 16.2% y/y from 15.1%.

The NBS commentary identifies energy products and import items as the principal drivers. Food price inflation in June was 15.3% y/y, compared with 14.9%. Seasonal, post-harvest effects may prove positive in the months ahead.

Energy cost increases were again heavy. The category for housing, water, electricity, gas and other fuels rose by 24.2% y/y in June (22.0% in May).  

The fx impact is discernible in the fact that the y/y rise in the urban index in June was running three percentage points ahead of its rural equivalent.



The CBN has started to adopt a less interventionist stance in the reformed foreign exchange market, which will be rewarded over time, we suspect, by autonomous inflows from the portfolio community and other players. Once the rate has overshot and then corrected itself, we see a mild easing of inflationary pressures. For July we see a headline rate of 17.4% y/y.

Our more eagle-eyed readers will have noticed that the headline rate y/y in June was higher than that of its constituent parts (non-food and food).  We must therefore spell out the NBS health warning that processed food stuffs are elements of both parts. Imported food inflation surged to 20.1% y/y in June from 18.6% the previous month.

Related News
1.       With Inflation at 16.5%, Nigeria Stumbles into the Reform Path–LBS Executive Breakfast Session July
2.      Headline Inflation soars to an 11-year high of 16.5% but month-on-month declines
3.      CPI Rises to 16.5% in June, 0.9% Higher Than 15.6% May Rate
4.      Inflation to Moderate Downwards to 15.4% in June 2016 - Access Bank Plc
5.      DLM estimates a marginal decline in Inflation Rate to 15.53% in June 2016
6.      Inflation Rate to Drop Marginally to 15.4% - FSDH
7.      Inflation hits a ceiling, set to decline marginally to 15.5% - FDC
8.     Nigeria Records Highest M/M Inflation in Four Years
9.      Spike in inflation rate continues, as headline inflation rises to 15.6%
10.  Inflation soars to a 6-year high of 15.6% - FDC
11.   CPI Rises to 15.6% in May, 1.9% Higher Than 13.7% April Rate
12.  Average Petrol Price Drops to N150.28 in May’16 from N162.82 in Apr '16 

Related News
SCROLL TO TOP