- Headline inflation grew by 12.56% YoY in June 2020; 0.16% higher than 12.40% recorded in the previous month.
- Food inflation grew by 15.18% YoY in June 2020; 0.14% higher than 15.04% recorded in the previous month.
- Core inflation grew by 10.13% YoY in June 2020; 0.01% higher than 10.12% recorded in the previous month.
Nigeria’s headline inflation accelerated for the 10th straight month in June 2020 as restrictions on access to foreign exchange and continued border closures drove up prices.
Headline Inflation
In June 2020, the headline inflation increased by 1.21 % MoM, this is 0.04% higher than the rate of 1.17% recorded in the previous month. The yearly average rose to 11.90% this current month, this is 0.11% greater than 11.79% recorded in the previous month.
This is the 10th consecutive monthly increase and the highest rate in over two years as supply disruptions caused by the planting season and the partial lockdown of the economy as well as exchange rate adjustments continue to pressure prices.
Food Inflation
In June 2020, the food index rose by 1.48% MoM, this is 0.06% higher than the rate of 1.42% recorded in the previous month. The yearly average rose to 14.46% this current month, this is 0.13% greater than 14.33% recorded in the previous month. The food index, which accounts for more than half the inflation basket, rose 15.20%, the highest since March 2018.
Core Inflation
In June 2020, the core index recorded a marginal decrease to 0.86% MoM, this is 0.02% down from 0.88% recorded in May 2020. The yearly average rose to 9.37% this current month, this is 0.1% greater than 9.27% recorded in the previous month.
Conclusion
We expect to see increased pressure on inflation in the near to medium term as food prices continue to rise with continued border closure as the Naira remains under pressure. The central bank’s move to end official foreign-exchange supply for corn imports to boost local production could increase costs further.
With the MPC meeting holding next week, it remains to be seen how the apex bank would react to the continued rise in headline inflation. Again, we maintain that the CBN’s posturing reflects deeper concerns on the exchange rate front.
Comercio Partners
