Inflation: Food Prices on the rise

Nigeria’s inflation rate has been projected to rise for the third consecutive month in October, driven by continued increase in food prices, occasioned by herdsmen attack on farmers and recent episodes of flooding which undermine food supply across the country. This was the consensus of analysts’ projections from FSDH Merchant Bank and Financial Derivatives Company (FDC) Limited. It can be noted that after 18 months of decline, inflation rate (year-on-year) rose in from 11.14 percent in July to 11.23 percent in August and further to 11.28 percent in September. While the National Bureau of Statistics (NBS) is scheduled to release the inflation figures for October next week, analysts at FSDH Merchant Bank and FDC projected 11.34 percent and 11.35 percent inflation rates respectively for October, citing continued impact of rising food prices. They however noted that the stability of the exchange rate, increased power output and lower liquidity in the interbank money market had moderating effect on the inflation rate in October. FSDH analysts said, “FSDH Research expects the inflation rate (year-on-year) to increase further to 11.34 percent in October 2018 from 11.28 percent recorded in September. The expected increase in the inflation rate will reflect higher prices observed within the Food and Non-Alcoholic Beverages division.

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