Inflation Forecast Report For October 2016

The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for October 2016 on November 17^ 2016, based on the Data Release Calendar available on the Bureau’s websiteThe Economic Intelligence Group forecasts inflation rate (year-on-year) to accelerate to 18.2% in October 2016 from 17.9% posted in September 2016. Our methodology adopts an autoregressive analysis of past prices, while it recognizes all the assumptions used by the National Bureau of Statistics (NBS) in its computation of monthly composite consumer price index (CCPI). We forecast inflation rate (year-on-year) to ascend to 18.2% from 17.9% reached in September 2016. 

• The anticipated upward movement in headline inflation in October reflects increases in both food and core components of inflation.

 

• The food component which constitutes the bulk of the inflation basket is anticipated to exert significant pressure during the period under review. This expectation is based on an independent survey of some household food prices such as rice, flour, pasta, tomatoes, cooking oil etc.

 

• The core index should also move upwards due to cost push influences stemming from continued depreciation of the Naira at the parallel foreign exchange market. The local currency shed 2.17% of its value against the US dollar in the month of October to end at N470/1USD.

 

• The country’s reliance on imports of raw materials, refined products and consumer goods ensures that Naira depreciation will continue to compound the effect of imported inflation.

 Attached is the detailed Inflation forecast report.inflation forecast