Ahead of the April 15, 2017 release date for Nigeria’s official inflation figures for the month of March 2017, by the National Bureau of Statistics (NBS), researchers at FSDH Merchant Bank Limited, on Thursday forecast that it could drop for the second successive month.
Year-on-Year inflation rate for March, they expect, could drop to 16.52% from 17.78% in February on the back of slower increases in food and non-food divisions than preceding months, among others.
According to FSDH’s Inflation Watch, “our analysis indicates that the value of the Naira depreciated at the inter-bank market, while it appreciated at the parallel market. The Naira lost by 0.28% at the inter-bank market to close at US$/N306.35 while it gained 13.42% at the parallel market to close at US$/N395 at the end of March.”
The report also linked the likely reduction in growth rate to the decision of the Central Bank of Nigeria (CBN) to increase Dollar supply, leading to appreciation in the value of the Naira at the parallel market, besides the drop in the prices of food at the international market that led to a fall in the prices of consumer goods in the country.
“The prices of food items that FSDH Research monitored in March 2017 moved in varying directions. The prices of garri, yam, beans, tomatoes and fish were up by 13.23%, 12.04%, 6.67%, 4.76% and 0.74% respectively.
“Meanwhile, the prices of onions, palm oil, Irish potatoes, sweet potatoes, rice and vegetable oil were down by 17.41%, 14.12%, 9.52%, 8.33%, 4.55% and 2.78% respectively. The price of meat however, remained unchanged. The movement in the prices of food items during the month resulted in 1.20% increase in our Food and Non-Alcoholic Index to 227.50 points. We also noticed increases in the prices of Housing, Water, Electricity, Gas & Other Fuels divisions between February 2017 and March 2017,” the report added.