The National Bureau of Statistics has released its August Inflation report confirming inflation rate topped 9.3% year on year for the month of August 2015.
According to the report, the Consumer Price Index (CPI) which measures inflation edged higher to 9.3% (year-on-year), from 9.2% in July. The marginal increase was as a result of slower increases in Alcoholic Beverages, Tobacco and Kola; Health, Transport; and Recreation and Culture Divisions.
On a month-on-month basis, the pace of increases of food prices as reflected by the Food Sub-index has slowed, contributing to the relatively slower pace of increases reflected on the year-on-year rates between July and August.
The Food Sub-index rose by 10.1% (year-on-year) in August, slightly higher from 10.0% in July. While increases were observed in major groups within the index: Bread and Cereals, Meats and Fish, the index was weighted upon by a slower increase in the Fruit, Vegetables, and Potatoes, Yams and Other Tubers groups.
This report basically confirms our analyst prediction that inflation rate will rise 9.3% this month and is expected to taper down as the year runs down.
With inflation rising and GDP growth stagnating, Nigeria faces a stagflation driven mostly by monetary policy actions amidst Fiscal inaction. How we intend to get out of this situation is currently unclear thus making this month’s MPC meeting one of the most important this year.