Inflation Report – October 2021

The NBS has released its October inflation report to show -

Headline rate 15.99% y/y (16.63% in September):

Core rate 13.24% y/y (13.74%); and

Food rate 18.34% y/y (19.57%).

  • October’s headline reading declined by 64bps (when compared with the previous month) to 15.99% y/y.
  • Food inflation also recorded a decline (of 123bps). The highest increases were recorded in coffee, tea, cocoa, milk, cheese, eggs, bread, cereals, vegetables, potatoes, yam and other tuber.
  • The highest increases in core inflation were recorded in prices of gas, fuels and lubricants for personal transport equipment, vehicle spare parts, passenger transport by road and air, garments, wine, among others.
  • On a month-on-month basis, headline inflation decreased to 0.9% in October from 1.2% in September
  • On a y/y basis, imported food price inflation rose to 17.24% y/y from 17.19% y/y recorded in the previous month. NAFEX turnover amounted to USD3.9bn in October according to FMDQ. Please note that the total inflow was USD1.9bn with the CBN accounting for 41.9%, while the non-bank corporates accounted for 21.6%.
  • The NBS also tracks headline inflation by state, with the highest, 19.63% y/y in Bauchi and the lowest, 11.82% y/y in Kwara. It is worth noting that household baskets vary across states due to different consumption patterns.
  • The CBN’s in-house estimates suggest that further rebound in economic growth is hinged on the continued stability in oil price and robust vaccination in Nigeria and across other countries. However, the important factors required to sustain the momentum include foreign exchange market stability, further reduction in inflationary pressure and continued interventions by the monetary and fiscal authorities.
  • The MPC is scheduled to hold its next meeting on the 22nd and 23rd of November 2021.

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