By KAYODE TOKEDE, Lagos and MBAKAAN KWEN, Abuja
The National Bureau of Statistics (NBS) has disclosed that the nation’s inflation rate slowed down to 15.37 per cent in 2017, making it the 11th consecutive decline year-on-year since January 2017.
The Bureau, in its Consumer Price Index (CPI) December 2017 report, said inflation rate slowed by 0.53 per cent points, lower than 15.90 per cent rate recorded in November.
A review of 2017 inflation rate showed that the rate opened at 18.72 per cent in January 2017 to close at 17.78 per cent in February.
In March, inflation rate closed at 17.26 per cent, the second decline recorded in two months.
The bureau had explained that growing prices in Housing, Water, Electricity, Gas and other Fuels, Education and Transport contributed to hike in inflation rate in the first quarter of 2017, following the unstable foreign exchange market.
Economy indicator had revealed that, while economy growth declined, the rise in inflation was inevitable as falling exchange rate and rising foreign prices passed through directly to domestic prices.
However, the inflation rate closed April at 17.24 per cent, 16.25 per cent in May 2017 and 16.10 per cent in June.
In the third quarter, the inflation rate slowed marginally to 16.05 per cent in July, 16.01 per cent in August and 15.98 per cent in September.
Towards the end of 2017, October to be precise, Inflation rate moved to 15.91 per cent in October and 15.90 per cent in November.
The report released by NBS yesterday noted that on a month-on-month basis, the headline index increased by 0.59 per cent in December 2017, 0.19 per cent points higher from the rate of 0.78 per cent recorded in November.
It said the percentage change in the average composite CPI for the twelve month period ending in December 2017 over the average of the CPI for the previous twelve month period was 16.50 percent, showing 0.26 percent point lower from 16.76 percent recorded in November 2017.
The Central Bank of Nigeria (CBN) Mr. Godwin Emefiele at the Annual Bankers’ Dinner in November had said, “Monetary policy stance could change when the underlying fundamentals become supportive. If the pace of disinflation becomes adequate and we see inflation at predicted levels, I am very optimistic that MPC may begin to see strong justification for an easing of monetary policy, which may further accelerate the recovery process.
“We believe that it may return to very low double digit or high single digit levels during the next year. Though the base effect had diminished, I expect that as the socio-economic factors that are driving food inflation are resolved the inertia therein would dissipate and the pace of headline disinflation will grow”.
Analysts at InvestmentOne Research said December 2017 Inflation report may further confirm expectations for the rise in consumer prices to moderate in 2018, on the back of the high base effect of 2017 as well as the willingness of the present administration to curtail any potential increase in energy and food prices, given the negative impact it may have on re-election prospects.
The InvestmentOne Research noted: “Our view remains that as we see headline inflation moderate towards the CBN’s target (11-12per cent) we are likely to see the Apex bank move to a more accommodative monetary policy.
“Nonetheless, we see the on-going scarcity of PMS, which contributed to the +18per cent m/m increase in the average PMS price paid by consumers in December 2017 (c.N172/litre), as a potential downside risk to our outlook, as well as disruptions to activities in the Agriculture sector and election spending”.
Elaborating on the implications, they said potential for a further decline in the rate of increase in consumer prices should be a positive for company performances in 2018, which should be a supportive of the equities market.
While speaking in Lagos, Minister of Budget and National Planning Sen. Udoma Udo Udoma said, “There is so much potential in the country and it is this potential and the results of our initiatives that make the 2018 outlook so positive.
“So, we are targeting a GDP growth rate of 3.5 per cent for this year and 7 per cent by 2020, and an inflation rate of 12.54 per cent for 2018 and single digit inflation of 9.9 per cent by 2020”
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