After almost two years of inflation rising to a 18 year high, analysts say the rate is expected to begin a descent early next year as the slope starts flattening out to a month-on-month decline.
According to Bismarck Rewane, Chief Executive Officer (CEO) of Financial Derivatives Company (FDC) Limited in a report made available to Blueprint Tuesday.
“Whilst headline inflation has maintained its upward trend, the cheery news is that the slope of the curve is flattening out. This coupled with the projected 0.18 per cent decline in month-on-month inflation to 1.54 per cent (20.23% annualized) suggests that inflation may be heading towards a point of inflection and could begin to taper as early as the first quarter of 2024”.
“Our forecast is that headline inflation will increase marginally by 0.17 per cent to 27.50 per cent (an 18-year peak). The food and core sub-indices are expected to witness marginal increases, rising to 31.8 per cent and 22.72 per cent respectively”, Rewane said.
He is optimistic that this will make the 2024 budget inflation goal of 21.4 per cent a more realistic target.
“Notwithstanding though, Nigerian inflation is still 19 per cent above the upper band of the CBN target (6.9%) and is much higher than the SSA average of 16.8 per cent” Rewane added.
In October 2023, the headline inflation rate increased to 27.33 per cent relative to the September 2023 headline inflation rate which was 26.72 per cent. Looking at the movement, the October 2023 headline inflation rate showed an increase of 0.61 per cent points when compared to the September 2023 headline inflation rate.
