Economic Brief: September Inflation reading eases to 15.98% & Outlook for October


Latest data from the National Bureau of Statistics (NBS) on Consumer Price Index (CPI) for September 2017 showed a further drop in the rate from 16.01% reported in August to 15.98% year-on-year (YoY). The headline inflation index released earlier today (October 18, 2017) decelerated for the eighth month in a succession.

On a month-on-month (MoM) basis, the headline index also dropped by 0.78% in September, representing 19 basis points lower than August’s 0.97%, indicating
a fourth month of decline.

CPI measures the average change over time in prices of goods and services consumed by people of a defined state or country for day-to-day living.The Headline Index (CPI) is made up of the Core Index and Farm Produce Index..

Amongst the CPI categories, the Food sub-index moved up to 20.32% YoY, 7 basis points higher than 20.25% reported in August. On a MoM basis, the food sub-index dropped for the fourth time in a row by 0.87%, representing 27 basis points below 1.14% posted in August. The lesser pressure on the index was as
result of by increases in prices of yams & other tubers, potatoes, bread & cereals,meat, fish, oils & fats, coffee, tea and cocoa.

The Core sub-index (All Items less Farm Produce) reversed uptrend witnessed last month to drop to 12.10% (YoY), representing 20 basis points lower. On a MoM basis, the index dropped to 0.80%, representing 13 basis points lower than 0.93% reported in August. The minimum increase here was due to minimum pressure on prices of; clothing materials, solid fuels, passenger transport by air, shoes & other footwear, furniture and furnishing, motorcycles, and non-durable household goods.

The Urban and Rural indices (localized prices) had a mixed growth. The urban index moved up to 16.18% (YoY), representing 5 basis points higher than 16.13%
posted in August. The rural index dropped to 15.81% (YoY), representing 10 basis points lower than 15.91% posted in August.

Notwithstanding this September’s marginal decline, the existing rate trail the single digit era by 20 months, last seen in January 2016.

Inflation Outlook for October: We project October inflation to drop to 15.80%, representing 9 basis points below the current figure. Our projection is based on the fact that we are already

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