November 18, 2024/InvestmentOne Report
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- According to data from the National Bureau of Statistics (NBS), Nigeria s annual headline inflation rate rose for the second consecutive month to 33.88% in October 2024. Relative to the previous month, this marked a 118bps advancement in consumer prices primarily due to increases in both the food and core basket.
- Food inflation continued to be a significant contributor to overall inflation due to the legacy issues in the sector amid the prevailing increases in logistics costs. Specifically, in October 2024, food inflation rose by 139bps to 39.16% YoY. On a monthly basis, food inflation increased to 2.94%, up by 30bps from 2.64% in September 2024.
- Core inflation, which excludes volatile agricultural produce and energy prices, rose to 28.37% YoY, primarily driven by the pass-through effect of rising transport cost following the upward revision of PMS prices to around NGN1,050 in October 2024. Consequently, the transport index surged by 205bps to 29.26% YoY.
- In the coming month, inflation is expected to sustain its upward trajectory, particularly as the surge in fuel prices filter through the economy. Additionally, stockpiling for the festive season may likely pose another layer of pressure to consumer prices. Essentially, inflationary pressures will remain elevated, necessitating the continued hawkish monetary policy stance of the Central Bank of Nigeria, albeit at a moderate pace in its upcoming policy meeting.
