Financial anslysts have projected that May 2019 inflation rate may rise to the highest level since the beginning of the year.
They also said that increase in inflation rate would not be good news for the economy or the purchasing power of Nigerian.
FSDH Nigeria research group in its current report faorecasted that the May inflation rate will further increase marginally to 11.39 per cent from 11.37 per cent recorded in April 2019.
The group in addition projected that, the month-on-month change in the Consumer Price Index (CPI) to increase by 1.10 per cent in May 2019, the highest since January 2019
According to the report “If FSDH Research’s May 2019 inflation rate forecast comes true, Nigeria may record the highest inflation rate figure since January 2019. That would not be good news for the economy or the purchasing power of Nigerians.”
The FSDH Nigeria economy 386 views reporting people saying that they will not appreciate a situation where the prices of consumer goods increase faster than the expected increase in the approved National Minimum Wage.
The report explained that with the onset of the rainy season, there is upward pressure on the food component of the inflation basket.
The report further said the major driver of the expected rise in the inflation rate is the increase in food prices, due to the seasonality effect typically associated with the onset of the planting season, adding that security challenges in some food producing regions in Nigeria reduce the supply of food items, leading to an increase in prices.
The current inflation rate is higher than the six per cent – nine per cent target set by the Central Bank of Nigeria (CBN). It is believed that given current realities, the inflation rate will remain above the CBN’s target in the short-to-medium-term and this may reduce the real yield on xed income securities.
The price monitor, the FSDH Research conducted on certain food and non-food items in May 2019 shows that most prices increased in May compared with April.
The report showed that a cursory look at the movement of prices at the international market and its likely impact on prices in the local market demonstrate an increase in imported inflation, prices of goods using imports as raw materials.
