Nigeria’s Headline Inflation Figures: Recovery Momentum

The annual inflation rate in Nigeria eased for the fifth straight month, down to 17.01% in August 2021 (from 17.38%, the previous month), and matching Bloomberg consensus estimate of 17.00%.

It is the lowest inflation rate seen since January 2021, mainly due to the slowdown in food inflation. Please see below, a summary of August’s inflation performance:

  • The Composite food index grew at a slower rate in the month, settling at 20.30% Y-o-Y from 21.03% in July 2021.
  • The Core sub index (All items less agricultural produce) was down 31bps at 13.41% Y-o-Y vs 13.72% in July 2021.
  • The Urban and Rural Inflation figures printed at 17.59% and 16.43% respectively Y-o-Y vs 18.01% and 16.75% recorded in July 2021.

We expect further stability in inflation figures, as the base effect from the previous year continue to push down year-on-year readings of inflation.

Please click here to see the full report from NBS

The Monetary Policy Committee (MPC) is expected to maintain all key rates at the upcoming monetary policy meeting as it remains crucial to keep long-term inflation expectations in check.

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