FBNQuest Projects 11.3% Inflation In May, Expects Rates Retention At MPC

FBNQuest Projects 11.3% Inflation In May, Expects Rates Retention At MPC

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Post Views: 100 Analysts at FBNQuest, the merchant banking and asset management arm of FBN Holdings Plc, on Wednesday welcomed the continued decline i...

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Analysts at FBNQuest, the merchant banking and asset management arm of FBN Holdings Plc, on Wednesday welcomed the continued decline in Nigeria’s inflation rate for the 15th consecutive month as published by the National Bureau of Statistics (NBS).
The deceleration, which it said was in line with expectation shared with wire services was driven principally by the decline in food price inflation from 16.1% to 14.8% YoY and Core inflation from 11.2% to 10.9% YoY. Following from this and based on the realities on the ground, the analysts expect a further decline in headline inflation to 11.3% Year-on-Year at the end of current month.
Also, FBNQuest in its Nigeria/Daily Morning Note of May 16, 2018, titled “a further steep decline in inflation,” expects “the positive base effects are set to run through to June/July.”
Despite the sustained drop in inflation, the researchers do not see any immediate rate cut by the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) when it meets next week.
“Signals from members’ latest personal statements suggest that the committee will not rush to adopt an easing stance,” FBNQuest stressed.
Those who do not support a rate cut immediately, including members of the MPC in their personal notes at the April meeting, draw attention to factors such as the anticipated spending for the 2019 general elections, beginning with the July governorship poll in Ekiti, followed by that of Osun. There is also as the 2018 budget was only passed by the National Assembly on Wednesday, which is coming with over N508bn that would shoot the figure to N9.12tn, from the N8.612tr original estimates presented to the legislature on November 7, 2017 by President Muhammadu Buhari.
In a tweet on Wednesday, Senator Shehu Sani, Kaduna State, explained that the decision to jerk up the budget “happened in close consultations and agreement between the National Assembly led by the Appropriation committee and the Executive. The committee confirmed this.”

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