July 23, 2018/Cordros Update
The National Bureau of Statistics (NBS) just published June 2018 inflation report, showing that Nigeria’s headline consumer price index extended deceleration (which started in 2017) to the seventeenth consecutive month. Headline inflation was 11.23% y/y in June, moderating from 11.61% y/y in May. The data came in 33 bps and 27 bps ahead of our forecast of 10.90% y/y and Bloomberg compiled average estimate of 10.96% y/y. On month-on-month basis, the headline index increased by 1.24% (vs. 1.09% the previous month).
Food inflation rose by 12.98% y/y in the review period, lower than the 13.45% y/y recorded in May. Notably, the highest increase was recorded in the prices of bread and cereals, fruits, vegetables, meat, oil and fats, fish, milk, cheese and egg, and potatoes, yam and other tubers. However, on m/m basis, food inflation increased again at a faster pace of 1.57%, compared to the 1.33% recorded in the previous month.
Core inflation was 10.4% y/y during the review period, vs. 10.7% in May. Similar to the observed trend in the previous month, the highest increases were reported in the prices of fuel and lubricants for personal transport and transport equipment, vehicle spare parts, dental services, books and stationeries, domestic and household services, hairdressing salons and personal grooming establishment, paramedical services, hospital services, garments, tobacco, actual and imputed rentals for housing, and passenger travel by road. On a m/m basis however, the core index increased at a faster pace of 1.03%, 5 bps above the 0.98% reported in May.