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Nigerian Inflation Slows for Ninth Straight Month in October
LAGOS (Capital Markets in Africa) – Nigerian consumer inflation slowed marginally for a ninth consecutive month in October as food-price growth stayed above 20 percent.
The inflation rate in Africa’s most-populous nation fell to 15.91 percent from 15.98 percent in September, the Abuja-based National Bureau of Statistics said in an e-mailed report on Tuesday. The median of 12 economists’ estimates compiled by Bloomberg was 15.9 percent. Prices rose 0.8 percent in the month.
On Nov. 21, policymakers are scheduled to review the benchmark rate, currently at a record high of 14 percent. They will probably leave the rate on hold following the release of this data, Michael Famoroti, an economist at Lagos-based Vetiva Capital Management, said by phone.
“We might see more pressure from energy prices going into December, a high energy-consumption month,” amid supply constraints, he said.
Growth in consumer prices will average about 12.4 percent next year, President Muhammadu Buhari told lawmakers earlier this month. That’s well outside the monetary authorities’ target range of 6 percent to 9 percent.
Buhari proposed a 16 percent increase in spending to 8.6 trillion naira ($24.2 billion) for next year. The International Monetary Fund forecasts the economy will expand 0.8 percent this year as output of oil, its biggest export, increases, and as dollar supply improves. Nigeria’s gross domestic product had its worst slump in a quarter century last year.
Economic expansion will probably allow the central bank to continue a tight monetary stance to fight inflation and maintain the stability of the exchange rate.
“Today’s inflation reading means that a cut at next week’s meeting — which didn’t look likely in the first place — is off the cards,” William Jackson, a senior emerging-market economist at Capital Economics Ltd. in London, said in an e-mailed note. Food inflation will probably decelerate “substantially” next year, with an interest-rate reduction taking place in the first quarter, he said.