June 11, 2018/Access Bank Plc
The National Bureau of Statistics (NB’S) is scheduled to release the inflation figure for May 2018 on June 13, 2018, based on the Data Release Calendar available on the Bureau’s website.
The Economic Intelligence Group forecasts May inflation rate (year-on-year) will drift lower to 11.56%, compared to 12.48% recorded in April 2018. Our methodology adopts an auto regressive analysis of past prices, while it recognizes all the assumptions used by the National Bureau of Statistics (NB’S) in its computation of monthly composite consumer price index (CPI).
· Looking in more detail at the drivers, our analysis indicates that the downward trend in inflation rate in May was largely due to fairly stable food prices, as the increase in some food items was offset by decreases in the cost of others, and stability in the currency.
· In May, prices of food and non-alcoholic beverages, the largest component in the CPI basket (with a weight of 51.8%) moved in mixed directions. According to our survey, prices for staple food commodities notably gnarr, tomatoes and tubers rose, reflecting lower supplies during the planting season – which lasts from mid-February to end of August. Meanwhile, processed foods such as milk, golden morn, and cornflakes nudged slightly lower, enjoying support from stable transport prices.
· The stabilization of the nadir (on both the official and the parallel rates) amid consistent CB USDA supply in its auctions kept the core index subdued in May. The local unit remained largely flat in the month at the parallel market, closing at N363/$ in May which matched the closing value in April.