August 16, 2022/InvestmentOne Update

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• In line with expectations, inflationary pressures in the Nigerian economy continued to soar to multi-year highs revealing the persistent passthrough effect of the protracted geo-political tensions, a major    driver that has stoked a cost-of-living crisis across the globe. Recent data released by the National Bureau of Statistics showed that headline inflation for the month of July 2022 printed at 19.64%y/y.
• In same pattern with headline inflation, food inflation in the period under review surged to 22.02%y/y, a steep increase of 142bps relative to last month’s record of 20.60%y/y. Month-on-month, food inflation rose by 2.04%, a marginal decline from 2.05% recorded in June 2022.
• Elsewhere, excluding volatile food prices, core inflation rose to 22.02%y/y from 15.75%y/y in June, an increase of 87bps. Similarly, an expansion of 1.75%m/m was also recorded as against the prior printing of 1.56%.
• Going forward, we opine that the northward trajectory in inflation will remain persistent in the short to medium term on the back of lingering inflation drivers, despite the signs of the Russian-Ukraine tensions gradually abating…