Nigeria Economy | |
Nigeria Economy | |
3768 VIEWS | |
![]() |
Friday,
March 08, 2019 12:49 PM / FDC
Nigeria’s headline inflation is expected to increase marginally by 0.03% to 11.4% in February, thus, reversing the downward trend recorded in the previous month. In the last three years, the PMI level in February was higher than in January. This is because of seasonality and a pick-up in activity after Christmas. However, in 2019, we have noticed a decline in the PMI which suggests an aberration in the trend due to elections and political activities.
Our projections also point to an increase in the month-on-month inflation (which is more reflective of current prices). The index is expected to inch up to 0.81% (10.15% annualized) from 0.74% (9.19% annualized) in January. There was a noticeable shift in consumer behavior in anticipation of elections and in reaction to the postponement.
The fundamental factors
that determine the price level have remained relatively stable. These include:
Possible
revision of projections by analysts
There have been projections
of a sharp increase in inflation by analysts. This was premised on the minimum
wage implementation and elections. The delay in the minimum wage implementation
has reduced the build -up in inflationary pressures, thus, signifying a
possible revision of the inflation forecasts.
Sub-Saharan
Africa
Three of the Sub-Saharan
Africa (SSA) countries under our review have released their February inflation
numbers. While Uganda recorded an increase, Kenya and Zambia posted a decline.
Meanwhile, Angola, South Africa and Ghana who are yet to release their
inflation data recorded declines in January.
Most of the SSA countries
under our review left their monetary policy rate unchanged at their first
meeting in 2019.
Concluding
Thoughts
The MPC meeting will hold
on March 25/26. If our projections are accurate, we do not anticipate a change
in the policy response as a result of the marginal increase in the inflation
level. The Central bank is likely to be unperturbed by the marginal change in
the price level at this time.
Related News
1.
Headline
Inflation Increases By 11.37% YoY in January 2019; 0.07% Lower Than December
2018 Rate
2.
Headline
Inflation To Dip To 11.35% in January 2019 - FDC
3.
Headline
Inflation Increases By 11.44% YoY in December 2018; 0.16% Higher Than November
2018 Rate
4.
A
Spike in Inflation Rate – Any Monetary Policy Response?
5.
Annual
Headline Inflation To Increase But Monthly Price Level Down
6.
We
See December 2018 Headline Inflation Rate At 11.8% YoY - FBNQuest
7.
Headline
Inflation Increases By 11.28% YoY in November 2018; 0.02% Higher Than October
2018 Rate
8.
Headline
Inflation Expected to Inch up to 11.27% in November 2018 - FDC
9.
Inflation
Rate to Rise Marginally to 11.28% in November 2018 - FSDH
10. Headline
Inflation Moderates To 11.26% (YoY) in October 2018; 2bps Lower Than September
2018