Analysts at Financial Derivatives Company Limited (FDC), a Nigerian diversified financial services institution, has predicted a 0.8 percent decline in consumer Price Index (CPI) for the month of March.
Although the National Bureau of Statistics (NBS) is expected release inflation figures for March this week, FDC forecasted that consumer Price Index (CPI), which is used to measure the level of inflation, will decrease to 8.7 percent from 9 percent and 9.5 percent recorded in the months of January and February respectively.
“Based on our analysis, we are forecasting that the national headline inflation for March will decline to 8.7 percent when the data is released (±0.14 percent), supporting our expectation of a moderating inflation environment in 2013,” a report released by the company over the weekend ascertained.
It added that now that the headline inflation was likely to fall below nine per cent, the interest rate debate would now likely become a burning issue amongst investors, fixed income traders and portfolio managers in the next few weeks.
“The next Monetary Policy Committee meeting will be preceded by April’s headline inflation which will determine if the declining inflation environment is sustainable. The inflation data for April may not be released before the MPC meeting; therefore the March data may be the lighting rod that will tilt the MPC’s thinking. However, if the April inflation data is released, it will only go to validate or negate the thinking of members,” says the report.
NBS put the country’s inflation rate for the month of February at 11.9 per cent; an 0.7 decrease compared to the 12.6 per cent recorded at the first month of the year.
According to the NBS in its monthly Consumer Price Index Report, “The Composite Consumer Price Index, which measures inflation, rose to 11.9 percent year-on-year in February 2012. This figure is 0.7 percentage points lower than the 12.6 per cent recorded in the previous month.”
“The monthly composite CPI was higher by 0.3 percent when compared with January 2012. The increase in the headline index, composed of the core and food indices, was due to the partial petrol subsidy removal that pushed up prices of many food and non-food items, including transport fares (not transportation in general).”
High prices of most food items (due to the increasing cost of cereals, yam, other tubers, cooking oil, meat, fruit, vegetables and beverages); liquid and solid fuels; furniture and transport fares were credited as the drivers of consumer inflation by the NBS.
