Chief executive Officer of Financial Derivatives Company Limited, Bismarck Rewane has projected that inflation is set to rise to 27.57 per cent due to a weak naira.
This is the ninth consecutive rise in inflation rates.
Analysts say it would represent the highest figure ever reached since September 2005.
“Nigeria’s headline inflation is expected to increase again in September, rising to 27.57 per cent from 25.80 per cent in August.
“Price increases were most notable in the food basket, predominantly commodities with high import content such as flour, semovita, noodles, and sugar.
“With prices rising, fingers are pointing towards the exchange rate as the major inflation culprit. The naira crossed the psychological threshold of N1,000/$ in the parallel market, pushing up imported inflation despite the relative stability in global food prices. The Food and Agricultural Organisation of the United Nations (FAO) food price index was relatively flat at 121.5 points (pts) in September.”, said Rewane.
Apart from the weak naira, drivers of inflation includes higher logistics costs and money supply growth (36 per cent year-on-year (y-o-y), saying the price of diesel, the major fuel used by trucks for logistics and distribution purposes, surged to a record high of N1,030/litre during the period.
“Notably, month-on-month inflation, which is a more current measure of price movement, is expected to decline marginally to 2.78 per cent from 3.18 per cent in August, largely due to the harvest season impact. This suggests that inflation is likely to reach an inflection point and could begin to taper in the first quarter of 2024.
