NIGERIA | Economic Update | 17-Oct-2017 | Elixir Research

banking 2

17 Oct NIGERIA | Economic Update | 17-Oct-2017 | Elixir Research

Dear Valued Investor,

September Inflation rate at 15.98%; 1 bps lower than forecast
• The headline CPI for September 2017 increased by 15.98% y/y, 0.03 percent points lower than 16.01% in August. Month-on-month, headline inflation rate rose by 0.78%, 0.19 percent points slower than the 0.97% increase in August.
• Food inflation rate increased by 20.32% y/y in August, 7 bps slower than the August rate of 20.25%. Month-on-month, the food index rose by 0.87%, 28 bps slower than the 1.14% in August. According to the NBS, this increase was driven by movement in the prices of potatoes, yams and other tubers, milk cheese and eggs, and bread and cereals.
• The core inflation eased relatively by 20 bps in September, rising by 12.10% y/y from 12.30% y/y in August. Month-on-month, the core inflation moved higher by 0.80%, much slower than the 0.93% recorded in August. The push in the core inflation came from increases in the prices of clothing materials and articles of clothing, solid fuels, garments, passenger transport by air and motorcycles.
The general movement in inflation contracted for the eighth time this year. This is broadly positive for both the economy and investment particularly from a real return perspective. The downward trend in inflation is an anchor for rate cut by the CBN. That said, we expect to see inflation sticky at the below 16% level for the rest of the year. Our September inflation forecast was 15.99%, 1 basis points. away from actual.