By Myke Uzendu, Abuja
Financial derivatives experts are projecting that inflation rate in Nigeria will rise further to 34.64 percent in November, when the National Bureau of Statistics (NBS) releases the data today, Monday, November 16.
Financial derivatives based its forecast on its Lagos market survey and regression model.
This 0.76 percent increase, it said, will be driven by seasonal factors and cost pressures, resulting in higher prices compared to the corresponding period in 2023.
The EIU forecasts inflation will peak at 35 percent in December 2024 and average 27.7 percent in 2025.
A disinflationary trend is expected in the long term, supported by forex stability, trade policy, and base effects
The food and core sub-indices are expected to move in tandem with headline inflation, rising to 40.02 percent and 29.38 percent, respectively, especially eggs, rice, vegetable oil, and sardines.
FDC analysts said monthly inflation, which is a more accurate measure of current inflation than annual inflation, is also projected to increase to 2.67 percent (annualised at 37.25 percent) from 2.64 percent.
In line with global and regional trends, the Nigerian MPC took a hawkish stance at its November meeting, raising the monetary policy rate by 25bps to 27.50 percent per annum.
An increase in the policy rate is expected to push up the cost of borrowing, reduce excess liquidity, and taper the general price level.
According to a statement from FDC, “since core inflation has remained stickier relative to the headline and food inflation, it will suggest that Nigerian inflation is more structural than transient.
“Therefore, inflationary pressures could persist if monetary tightening is not complemented by other economic policies.”
The MPC will meet next in January, and the consensus opinion is that the CBN will continue its tightening process, as this aligns with the trend, given that inflation is expected to maintain its upward trajectory. However, a moderation in inflation is likely before mid-2025 as inflation begins to taper.