Story by Kayode Tokede
Analysts at Financial Derivates Company Limited (FDC) has expressed that drop in inflation means that some of the Central Bank of Nigeria (CBN) policies to contain inflation can be considered to be successful.
The National Bureau of Statistics (NBS) for the third time since December 2018 has reported drop in inflation rate.
The Bureau had reported that inflation rate slowdown to 11.31 per cent in February 2019 from 11.37per cent and 11.44 per cent for January 2019 and December 2019 respectively.
According to FDC latest report, “Contrary to FDC projection for an increase in headline inflation in February, the data released today by the NBS showed a slight decline to 11.31 per cent.
“This is the third time inflation has declined in the last 6 months. The moderation in inflation will be cheery news to the doves in the monetary policy committee at their meeting in March. Because, it means that some of the CBN’s policies to contain inflation can be considered to be successful.”
The report by FDC stated that “The NBS data also shows that monthly inflation fell in line with the annual headline inflation.
“The month on-month inflation fell to 0.73per cent (9.12per cent annualized) in February from 0.74per cent (9.19per cent annualized) in the previous month. Sub-Saharan Africa (SSA) – Ghana’s inflation up after touching a 6-year low in January.”
On inflation outlook for this year, the report said, “The commencement of the planting season in second quarter would reduce output.
“This in addition to the implementation of the minimum wage could mount pressure on commodity prices, thus, heightening inflationary pressures.”