Nigeria’s inflation rate decelerates for sixth consecutives months to 16.6% in Sept

Nigeria’s inflation rates slowed down for the sixth consecutive months by 0.38% year-on-year to 16.6% in September 2021, the National Bureau of Statistics (NBS) latest Consumer Price Index (CPI) report on Friday, has shown.

Analysts from Afrinvest Securities had projected that the country’s the headline inflation rate would to 16.7% in September.

The decline in the y/y headline inflation rate was due to a 0.74% y/y decline in food inflation rate to 19.6%, supported by a high base-year effect from 2020.

However, the headline inflation rate climbed by 0.10% month-on-month to 1.2% (August: 1.0%) while the food inflation rate rose 0.19% m/m to 1.3%.

Conversely, the core inflation rate advanced by 0.34% y/y to 13.7% as it rose 0.47% m/m to berth at 1.2% in September 2021.

Imported food inflation rose to 17.2% y/y from 17.1% y/y in August, stoked by the weak domestic currency. Disaggregating the domestic non-food component, only Health (15.3% y/y vs 15.5% y/y in August) recorded a noticeable slowdown in price growth.

“Although we expect the y/y headline inflation rate to further moderate in October to 16.0% on high base-year effect, risks to the outlook include further increase in the cost of energy commodities (noticeably, diesel and gas), and renewed pressure on the exchange rate,” analysts in Afrinvest Securities noted.