Inflation rate report for the month of February is scheduled to be released by the National Bureau of Statistics on Friday, 15th of March 2019. Ahead of the release of the inflation data, opinions differ as to the direction for the month of February. Some are of the view that the headline rate would take a U-turn from its southward trend on the backdrop of election spending in the month of February, while others believe that inflation would further ease on slower pace witnessed on food prices in the said month.
Historically, we observed that the inflation rate increased in the election months of 2011 and 2015 elections (March 2015 and April 2011). Although, the CBN has sustained its liquidity mop-up via OMO, in aggregate demand in the weeks leading to the 2019 election, may pressure prices northwards in Feb-2019. Thus, if history is anything to go by, we may see a marginal uptick in the inflation rate for the month of February.
Accordingly, we expect a marginal uptick in the headline inflation rate to 11.38%, above CBN’s single-digit target, but well below the current MPR of 14.0% in February 2019. Meanwhile, in the interim, we anticipate moderation in general prices on the back of stability in the polity.
UNITED CAPITAL RESEARCH
