Culled—Proshare
October 18, 2017/FBNQuest Research
The latest inflation report from the NBS shows headline inflation y/y at 16.0% in September: this was the eighth successive slowdown, albeit by just 3bps on this occasion. Our expectation, shared with wire service polls of analysts, was an uptick to 16.3% y/y. Core inflation slowed from 12.3% in August to 12.1% y/y while food price inflation was 7bps higher at 20.3% y/y.
Policymakers will note that the m/m rate for all three measures declined in September for the third month in succession: by 19bps for the headline measure, by 13bps for core inflation and by 27bps for food prices. They can therefore conclude that there is a movement towards general price stability.
The CBN’s reference range for the headline rate, for what it is worth, is a y/y target of between 6.0% and 9.0%. We do not see the attainment of this range before 2019.
For imported food prices September brought both m/m and y/y increases. Given the stability of the fx rate in the various windows in recent months, the first probably reflected rises in the dollar price of individual food commodities.
