Analysts at Access bank forecast 16.64% inflation rate for January
By Kayode Tokede
Access Bank’s Economic Intelligence Unit (EIU) forecasts headline inflation for January 2021 to rise to 16.64per cent from 15.75 per cent recorded in December 2020.
The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for January 2021 on Monday based on the data release calendar available on the Bureau’s website.
They expressed that the rise in inflation rate will mark the 17th consecutive month of ascending inflation, stressing that the towering trend reflects the effects from economic recession triggered by the ongoing pandemic.
According to Access bank’s EIU report, “Our methodology entails the application of an autoregressive econometric model using lags of the composite Consumer Price Index (CPI) and a survey-based inflation expectation within the same product definitions adopted by the NBS.
“Transportation and food prices continued to ascend reflecting higher petrol prices and food supply disruptions. Given this pattern, we expect the CPI to settle at 361.77 points from 355.91 in the preceding month.
“Although the reopening of land borders across the country played a role in price reduction for some products, the economy still reels from effects of the ongoing pandemic, electricity tariff hike, currency depreciation and economic recession, which all contributed to the price hikes in the month.
“Prices of food and non-alcoholic beverages, the largest component in the consumption basket (with a weight of 51.8per cent) majorly sustained a mixed trajectory in prices. Some of the items that trended upward include but were not limited to; garri (18.6 per cent), ogbono (14.3%), beans (7.6 per cent), egg (7.2 per cent), vegetable oil (nine per cent), and sweet potatoes (8.3 per cent) while some items recorded price decline namely tomatoes (38.5 per cent), onions (23.3 per cent), pepper (6.7 per cent) and foreign rice (four per cent).
“Although the reopening of land borders across the country played a role in price reduction for some products, the economy still reels from effects of the ongoing pandemic, electricity tariff hike, currency depreciation and economic recession, which all contributed to the price hikes in the month.”
“Petrol pump price remained between N159 and N169 per litre.”
On Monetary Committee Policy (MPC) responses, they expressed that , “The CBN unanimously left the MPR unchanged at 11.5per cent at its last meeting held in January 2021.
“This was in a bid to hasten the economy recovery process, maintain price stability, provide cheaper credit to improve aggregate demand, stimulate production, support recovery of output growth and a competitive rate environment that stimulates the much-desired foreign portfolio inflows in the short to mid-term.
“Nonetheless, we note that the CBN is likely to sustain policies that will cushion the negative effects of the coronavirus whilst enhancing overall economic growth.”
