Inflation Report For September 2021

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Inflation
Inflation Report – September 2021

The NBS has released its September inflation report to show –

Headline rate 16.63% y/y (17.01% in August):
Core rate 13.74% y/y (13.41%); and
Food rate 19.57% y/y (20.30%).

• September’s headline reading declined by 38bps (when compared with the previous month) to 16.63% y/y.

• Food inflation also recorded a decline (of 73bps). The highest increases were recorded in bread, cereals, fish, coffee, potatoes, oils and fats, yam and other tubers, milk, cheese and eggs.

• The highest increases in core inflation were recorded in prices of household textile, vehicles, garments, major household appliances, hospital services, catering services, among others.

• On a month-on-month basis, headline inflation increased to 1.2% in September from 1.0% in August.

Inflation Report For September 2021

• On a y/y basis, imported food price inflation rose to 17.19% y/y from 17.12% y/y recorded in the previous month. NAFEX turnover amounted to USD4.5bn in September according to FMDQ; please note that the total inflow was USD1.7bn with the CBN accounting for 35.4%, while the non-bank corporates accounted for 25.6%.

• The NBS also tracks headline inflation by state, with the highest, 20.82% y/y in Kogi and the lowest, 13.70% in Kwara. It is worth noting that household baskets vary across states due to different consumption patterns.

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• The CBN’s in-house estimates suggest that further rebound in output growth will hinge on continued stability in oil price and robust vaccination in Nigeria and across other countries. However, the important factors required to sustain the recovery momentum include foreign exchange market stability, further easing in inflationary pressure and continued interventions by the monetary and fiscal authorities.

• The MPC is scheduled to hold its next meeting on the 22nd and 23rd of November 2021.