Nigeria and the Battle between Prudence and Stimulus

Proshare

Thursday, October 18, 2012 8:25 PM / FDC

 

The September inflation of 11.3%, a decline of 0.4%, came as a surprise to most analysts. This was partly because the food index in September rose to 10.2%.

 

Markets are in a quandary as to the inflation expectations for October.

 

Some are of the view that the disruptive effects of the floods could lead to a spike in prices, thus ending a 3 month run of falling inflation.

 

Others believe that the flood effect is exaggerated and will be almost neutral on prices.

 

On the fiscal side, the controversy over the benchmark price of oil rages between the President and the National Assembly. 

 

FDC believes that the benchmark tussle is a proxy war between the governors and the President for political considerations.

 

The truth is that most projections point towards a softening of oil prices in the medium term which means that even $75 is too optimistic.

 

The battle between prudence and stimulus is a major consideration in this edition of the FDC bi-monthly publication.

 

Download here - The FDC BI-MONTHLY ECONOMIC & BUSINESS UPDATE, OCTOBER 2012

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