Friday, August 18,
2017 10:40AM / Access Bank
Economic Intelligence Unit
National Bureau of Statistics (NBS) is scheduled to release the inflation
figure for July 2017 on August 16, 2017 based on the Data Release Calendar
available on the Bureau’s website.
Economic Intelligence Group forecasts inflation rate (year-on-year) to trend
downwards to 15.94% in July 2017 from 16.10% posted in June 2017. This
would be the sixth consecutive month that the pace of annual inflation will
slow after reaching a peak of 18.72% in January.
methodology adopts an autoregressive analysis of past prices while it
recognizes all the assumptions used by the National Bureau of Statistics (NBS)
in its computation of monthly composite consumer price index (CCPI).
in more detail at the drivers, the moderation in the inflation rate in July
comes as rising prices for food items were partially offset by a drop in core
inflation. In July, prices of
food and non-alcoholic beverages, the largest component in the consumption
basket (with a weight of 51.8%) rose slightly. According to an independent
survey, prices of main staple food commodities such as Beans and Yam ticked
to the NBS, the Food Index increased by 19.91% year-on-year (y-o-y) in June,
0.64 per cent points higher than the rate recorded in May (19.27%). Core
inflation, which excludes the prices of volatile agricultural produce, extended
its downward trend in July.
is partially attributable to increased FX availability and the appreciation of
the naira on the parallel market. The value of the Naira remained stable
at the interbank market while it appreciated at the parallel market by 0.54% to
close at $/N365.00 from $/N367 at the end of June.
core inflation for the month of June stood at 12.5%, 0.5 per cent lower than
the 13% recorded in May 2017 and the 7th consecutive monthly decline in the
core index since December 2016.
Probable Market Impact
Money and Fixed Income Market
the deceleration in the inflation rate, relative exchange rate stability, and
the prospect for further primary debt issuance, the demand for longer-dated
paper should increase.
that inflation is still far above the Central Bank’s target range (6- 9%
y-o-y), the apex bank is likely to take a cautious approach in any move towards
a more accommodative monetary policy.
we expect the benchmark policy rate to remain at the prevailing level of 14%.
no change in the monetary policy rate anticipated, we expect FX stability to
remain the primary aim of CBN monetary policy, prompting it to maintain
open-market operations, pre-funded FX auctions to mop up excess liquidity, and
issuance of stabilization securities to deal with maturing debt instruments.
Headline Inflation in July to Marginally
Increase to 16.26%
Nigerian Economy Signals a Turnaround
PMI Reading Sustains Uptrend… Manufacturing Sector
Expands for Fourth Month
Inflation Rate to Drop Further to 15.96% in July 2017 -
5. Nigeria PMI - Steady Expansion Continues In Third Quarter
6. PMI Reading No 52: A Fifth Month Above
7. Nigerian Economy on a Recovery Path
8. CPI Drops to 16.10% in June 2017, 0.15%
Lower Than 16.25% May Rate
9. Headline Inflation in June 2017 to
Decline to 16.1%
10. Inflation Rate to Drop Further to 15.64% - FSDH
11. Nigeria: Growth Positive, But Lacklustre