October 13, 2020/Access Bank Plc Report
The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for September 2020 on October 15, 2020, based on the data release calendar available on the Bureau’s website.
Access Bank’s Economic Intelligence Unit forecasts headline inflation for September 2020 to rise to 13.63% from 13.22% recorded in August 2020. This will mark the 13th consecutive month of ascending inflation. The towering trend reflects the economic backlash from the ongoing pandemic.Our methodology entails the application of an autoregressive econometric model using lags of the composite consumer price index (CPI) and a survey based inflation expectation within the same product definitions adopted by the NBS.
Transportation and food prices rose mirroring the rise in energy prices and instability in the economy. Given this pattern, we expect the CPI to settle at 339.3 points from 334.6 in the preceding month.
Inflation Forecast Drivers
- The upsurge in transportation cost,fuel prices and electricity tariffs played a major role in the price rise for the month, grappled with the friction in food supply shortages owing to the residual effects of the Covid-19 pandemic.
- Prices of food and non-alcoholic beverages, the largest component in the consumption basket (with a weight of 51.8%) majorly retained an upward trend. Household food items and increment rate in September were but not limited to; tomatoes (16.7% – 21%), onions (7.9%), chicken (7.7%), vegetable oil (12.7%) and cosmetics.
- In a separate development,a few items trended downwards which include maize (14.5%), yam (10.5%), beans (6.3%) and pepper (3.1%).
- The Naira appreciated at the parallel to N465/US$ as at September from N478/US$ in the preceding month.
- Petrol pump price rose to between N159 and N169 per litre from N145 per litre.
- Electricitytariffspikedby106%toN62.33perkWh (kilowatt unit of energy per hour) from N30.23 per kWh.
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