Inflation rate drops for 18th consecutive month to 11.41% in July

Nigeria’s inflation rate has dropped in July for the 18th consecutive time, the National Bureau of Statistics (NBS) has said.

In the July inflation report by the statistics bureau on Wednesday, the nation’s Consumer Price Index (CPI) fell from 11.23 percent year-on-year (YoY) in June 2018 to 11.14 percent YoY in July 2018.

On a month-on-month basis, the index dropped from 1.24 percent recorded in June to 1.13 percent in July.

​The CPI measures inflation, the composite changes in the prices of consumer goods and services, such as food, transportation, and medical care, purchased by households, over a period.

Despite the consistent drop in the headline inflation index, the nation’s rate of increase in the prices of good and services still remained above the Central Bank of Nigeria’s acceptable band of 6 percent to 9 percent in the month under review.

The NBS said the food inflation also dropped to 12.85 percent YoY in July down from 12.98 percent recorded in the preceding month, while core inflation, which excludes agricultural produce, stood at 10.2 percent in the review month from 10.4 percent recorded in the previous month.

The urban inflation rate eased to 12.66 percent YoY in July 2018 from 12.68 percent recorded in June, while rural inflation rate remained unchanged at 10.83 percent from the previous month

last week, FSDH Research, it its July inflation watch report, had projected the decline by 22 basis point, it attributed the decrease in the inflation rate to the base effect of the previous year.

FSDH noted that the general decline in the international prices of food coupled with the appreciation in the value of the Naira at the parallel market muted the prices of imported consumer goods in Nigeria between June and July.

A Deputy Governor of the CBN had last week said the apex bank may consider raising its key lending rate for the first time in two years if the inflation rate fails to slow in July.

With the latest development, the bank regulator may retract its earlier position to increase the monetary policy rate from an all-time high of 14 percent.