December 21, 2022/InvestmentOne Update
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- The recently released Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS) revealed Nigeria’s inflation remained upbeat for the tenth consecutive month. According to the report, headline inflation advanced by 38bps to 21.47% y/y (still the highest record since September 2005) in November from 21.09% y/y in October.
- Decomposing the report further, food inflation stayed elevated for the ninth straight month, accelerating by 41bps to 24.13% y/y (the highest point since October 2005) in November. On a monthly basis, the sub-index reversed the downtrend witnessed in the past four months, rising to 1.40% from 1.23% in the prior month.
- The core inflation basket was also not left behind as it jumped by 48bps to 18.24% y/y (highest reading since November 2016) in the period under review. The monthly print followed suit as it rose to 1.67%.
- Going forward, we opine that inflationary trend remains biased northward on the back of the troika impact of the surge in food prices due to the festive induced demand amid insufficient supply, continued increase in energy costs and FX depreciation. While we expect a disinflationary trend to set in on the year-on-year numbers as we forecast headline inflation settling at 21.08% y/y in December due to a favourable base effect. Nonetheless, the aforementioned factors are likely to keep month-on-month inflation rising as we expect m/m headline inflation settling at 1.50% for December…
