Analysts expect Nigeria’s July inflation would decelerate slightly compared to June when it stood at 34.19 per cent.
In its macroeconomic update released on Tuesday, Meristem Securities analysts said that they expected a slowdown in food inflation in July 2024, driven by the increased supply of essential food items like yam, which led to lower prices.
“Other key staples like tomatoes and rice also saw a decline during the month. Moreover, the high base effect from July 2023 is anticipated to further temper inflation figures in July.”
Inflation is often expressed as a month-over-month figure or a year-over-year figure.
Typically, economists and consumers want to know how much higher or lower prices are today than they were one year ago. But a month in which inflation spikes may produce the opposite effect a year later, essentially creating the impression that inflation has slowed.
This projection came ahead of the release of the inflation figure for July 2024 by the National Bureau of Statistics expected on Thursday.
The NBS data indicated that the headline inflation rate rose higher in June to 34.19 per cent up from 33.95 per cent in May, due to higher food prices, particularly for cereals and wheat.
Analysts have said that several factors, including the ongoing insecurity in food-producing regions, the continued depreciation of the naira, and challenges in the country’s food sector contributed to the hike.
Afrinvest in its macroeconomic update also projected a decline in the inflation figure on the back of lower food prices.
“Based on our model projection, we estimate that the headline rate would decline by 107bps to 33.12 per cent in July. This expected decrease is largely attributable to the high base effect,” they said.
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