June 14, 2017/Access Bank Plc

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The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for May 2017 on June 15, 2017, in accordance with the Data Release Calendar available on the Bureau’s website.

The Economic Intelligence Group forecasts inflation rate (year-on-year) to decline to 16.34% in May 2017 from 17.24% recorded in April 2017. This would mark the fourth consecutive month of deceleration from a peak of 18.72% attained in January. Our methodology adopts an autoregressive analysis of past prices, while it recognizes all the assumptions used by the National Bureau of Statistics (NBS) in its computation of monthly composite consumer price index (CCPI).

·         May 2017 inflation will slow down largely as base effects from the 68% pump price hike in May 2016 drop off the CCPI series. The price hike largely accounted for over half of the 2.8% month-on-month jump in May 2016 inflation.

·         May’s easing of price pressures also reflects stability in the food index, which carries the largest weighting at 51%. According to an independent survey, prices of major staples including cereals, tubers and legumes remained largely stable in most markets monitored across the country as compared to previous month.  This is expected to contain the overall inflation indices.

·         Core inflation, which excludes farm products and energy prices, is expected to continue trending downwards in the month of May owing to increased FX availability and the appreciation of the naira on the parallel market. The value of the Naira remained stable at the interbank market, while it appreciated at the parallel market by 2.05% to close at US$/N382.00 from US$/N390 at the end of April.