Nigeria’s annual consumer price inflation moved lower for the second straight month in October after a six-month rising streak, easing to 8.1% from 8.3% in September, as the growth in food prices continued to slow down, data from the country’s National Bureau of Statistics (NBS) showed. The reading remained within the central bank’s 6%-9% target band for the 18th straight month.
The annual food inflation (measured by the food sub-index, which includes farm produce and processed food) decelerated to a seven-month low of 9.3% last month from 9.7% in September. The annual core inflation, which excludes the prices of volatile agricultural products, remained flat at a 16-month low of 6.3%.
Compared to the previous month, Nigeria’s consumer prices rose 0.51% in October, slowing from September’s 0.55% increase. Monthly food inflation decelerated to 0.5% from 0.6%, while monthly core inflation remained flat at 0.6%.
The average inflation for the 12-month period to end-October was 8.0%, the same as in the preceding five months, with average food inflation also staying unchanged at 9.5%, while average core inflation eased to 7.1% from 7.2%.
At its latest policy meeting held in September, Nigeria’s central bank kept its monetary policy rate unchanged at an all-time high of 12%, pointing at the recent uptick in inflation as one of the key risk factors that prevent monetary easing. However, at its next meeting later this month, the central bank should take into account the recent depreciation of the local naira currency that has been caused mainly by the drop in global oil prices.
The NBS plans to reweigh the inflation index to 2009 from 2004 to take into account the changing consumption patterns of the growing middle class with rising incomes. The re-basing exercise, which is expected to be completed by the end of this year, seeks to reflect the impact of non-food items on prices more accurately, as the middle class is spending more on capital goods like cars and less on food. Volatile food prices now account for about 60% of the consumer price basket.
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