Nigerians should expect higher inflation for November, Analysts say

Women at a fish market in Makoko slums in Yaba, Lagos, Nigeria, October 9th, 2009. The extensive slum is built on top of water, using timber and iron sheets; and it is inhibited by the fishing community who live in Nigeria as immigrants from the neighbouring countries in Ghana, Benin and Burkinafaso. PHOTO/STEPHEN MUDIARI

On the other hand, analysts have projected higher inflation rate for November, and hence the fourth consecutive monthly increase in the inflation rate.

The projection is coming ahead of the release of November inflation figures this week by the National Bureau of Statistics (NBS). The inflation rate has been on the rising trend since August when it dropped to 11.02 percent from 11.08 percent in July.

However between August and October, the inflation rate rose by 58 bpts to 11.6 percent due to impact of border close on prices of foods.

This trend according to analysts at Lagos based Financial Derivatives Company Limited, persisted to produce a higher inflation rate in November.

Projecting an inflation rate of 11.88 percent for November, they said: “Based on our survey, headline inflation for November is projected to increase to 11.88 percent from 11.61 percent in October. In the last six months, headline inflation has increased for three months. If our projections are accurate, it will be the fourth month of rising inflation.

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“In recent times, there have been more factors stoking inflationary pressure, despite the recent growth in output recorded in Q3 (2.28 percent). Factors such as the border closure, lower interest rates and increased liquidity have impacted negatively on the consumer price index. The border closure has led to a spike in the prices of commodities such as rice, chicken, and turkey while lower interest rates are a disincentive to save.”

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