By InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria’s Inflation Rate for December is 12 percent (12%).
Recent data from the National Bureau of Statistics reports December headline inflation at 12.0% year on year (y-o-y), a 30bps decrease from the 12.3% y-on-y figure recorded in November 2012. Food inflation also eased to 10.2% y-on-y, a 40bps decline from the 11.6% recorded last month. Core inflation (measured by all items less farm produce index) however rose by 70bps y-on-y to 13.7% from the 13.1% recorded in November 2012.
Overall, we expect inflationary pressures to ease over the next two quarters, as we attribute the acceleration in Q4 2012 to the transitory spikes in domestic food prices due to the floods last year, while the hikes in housing, electricity, gas and other select commodities may be deemed to be the implied cost of reforms by the Federal Government.
We however believe that the upward review of the oil price benchmark to US$79 per barrel as contained in the recently passed 2013 budget, provides additional room for increased government spending and therefore poses a direct upside threat to inflation. We therefore expect the CBN’s Monetary Policy Committee to keep the MPR on hold at its next committee meeting scheduled for early next week.
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