Headline Inflation Rate Estimated to Ease to 14.30%
In what appears to be an unusual consensus, two leading investment firms have estimated that Nigeria’s inflation rate for November will print at 14.30% ahead of data release by the statistics office.
The National Bureau of Statistics (NBS) is expected to release the consumer price index report in the new week amidst sustained disinflation.
In October, Nigeria’s headline inflation printed low at 16.05%, and a slew of Broadstreet analysts maintain disinflation will persist for 2025 following the rebased exercise.
In a note, the research subsidiary of Coronation Merchant Bank Limited hinted that inflation rate for November will decline to 14.30%.
Meanwhile, AIICO Capital Limited shared the same sentiment, stating that bumper food harvests, stable FX and base-year effect will sustain headline deceleration in November.
The anticipated slight uptick in month-on-month headline inflation is largely driven by movements within the food and the core consumer price index components, Coronation said in its report.
On the core side, inflation is set to rise due to seasonal increases in consumer demand and transport activities as traders prepare for the festive season, alongside higher restaurant, accommodation, and service costs driven by elevated festive-related demand.
These pressures are reinforcing higher operating and logistics costs for firms, which in turn are keeping core inflation sticky, Coronation Research explained.
The research unit said after four consecutive months of decline, food inflation is expected to rise slightly as supply-side challenges intensify, on the back of insecurity issues in key producing regions and delays being experienced in moving produce to markets.
Globally, food prices continued to ease, with the FAO Food Price Index declining for the third consecutive month to 125.1 points in November.
“Although wheat and maize prices edged higher due to Black Sea tensions and strong global demand, the broader softening helped limit imported food pressures.
“However, on the domestic front, the decline in Premium Motor Spirit (PMS) prices, as Dangote lowered its gantry price from N877 to N828 per litre, should support a mild easing in transport-related costs.
“In addition, exchange rate conditions remained relatively stable despite a modest 1.72% depreciation to N1,446.74/US$1, thereby containing imported inflation and providing a degree of price stability across tradable goods.
“Overall, while global and domestic disinflationary factors continue to offer support, sticky service prices and lingering structural cost pressures are expected to limit the pace of disinflation in November”, Coronation highlighted.
AIICO Capital Limited inflation rate expectation is based on projections regarding the convergence of the two components of headline food price and core price indexes—in November.
The firm said its analysis indicates that core inflation, which reflects changes in the average price of non-farm produce, is expected to ease by a minimum of 16 bps to 1.17% m/m and 10 bps to 18.02% year on year.
“This anticipated decline is largely attributable to base-year effects, despite the Monetary Policy Committee’s (MPC) decision to hold the Monetary Policy Rate (MPR) at 27.00%, while adjusting the Standing Facility Corridor from +250/-250 bps to +50/-450 bps around the MPR—thereby allowing room for lower funding costs among lenders,” AIICO said. CBN Funds International Payments with $250 Million
