The prevailing crisis in Nigeria’s food producing states is putting pressure on food prices, which would become a major risk to the achievement of a single digit inflation rate in 2018, say analysts at FSDH research.
To this end, the researchers project that Nigeria’s inflation will remain in double digit end-2018.
FSDH research however expects the inflation rate (year-on-year) to drop to 11.01 percent in July 2018 from 11.23 percent recorded in the month of June.
The expected decrease in the inflation rate is largely attributable to the base effect of the previous year.
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According to the researchers, the prices of most of the food items they monitored in July 2018 showed a slower increase compared with June 2018.
“The movement in the prices of food items increased our food and non-alcoholic index by 1.18 percent in July compared with an increase of 1.56 percent recorded in June.”
FSDH research also noted that the June inflation figure recorded the highest month-on-month increase since June 2017.
“Although the inflation rate may continue to drop, it may remain in double digits in 2018.
Under the current situation, FSDH Research expects the inflation rate to end the year in the region of 10.4 percent.
The expected drop in the inflation rate may lead to a further drop in the yields on Nigerian Treasury Bills (NTBs),” they said.