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Tuesday, October 3, 2023

Nigeria’s Inflation Eases for 4th Straight Month in July on Food Prices

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Nigeria’s annual inflation dipped for the fourth straight month in July to 17.38% thanks to a slow-down in food price increases, the statistics office figures showed , ahead of second quarter output data next week.

Inflation, which has been in double-digits since 2016, stood at 17.75% in June.

Food price inflation, the major component of the headline figure, eased 80 basis points from the previous month to 21.03% in July, the National Bureau of Statistics (NBS) said. However, core inflation, excluding prices of farm produce, rose 63 basis point to 13.72%.

“The highest increases were recorded in prices of garments, shoes and … vehicle spare parts, major household appliances, pharmaceutical products and hospital services,” the NBS said in a report.

The government has said inflation is a structural problem linked to structural deficits and not solely a money supply issue, pointing out that most of it was also imported.

The central bank has kept its benchmark interest rate on hold at 11.5% for almost a year and continues to pursue a managed float of the naira currency, as it tries to boost growth while combating rising inflation.

Economic growth has resumed in Nigeria after the COVID-19 shock but lags the rest of sub-Saharan Africa, the World Bank has said, citing food inflation, heightened insecurity and stalled reforms increasing poverty.

The government plans to issue Eurobonds this year to partly finance its fiscal deficit and boost reserves to support the naira.

The statistics office is due to release second quarter gross domestic product figure on Aug. 26.

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