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Nigeria’s inflation drops to 11.61% in May, meaning successive fall in 16 months

The National Bureau of Statistics (NBS) on Wednesday, released figures for May 2018 inflation report, showing that Nigeria’s headline consumer price index extended deceleration (which started in 2017) to the sixteenth consecutive month.

Headline inflation was 11.61% y/y in May, moderating from 12.48% y/y in April. The data came in 25 bps and 11 bps ahead of our forecast of 11.36% y/y and Bloomberg compiled average estimate of 11.50% y/y. On month-on-month basis, the headline index increased by 1.09% (vs. 0.83% the previous month).

Food inflation rose by 13.45% y/y in the review period, notably lower than the 14.80% y/y recorded in April. Notably, the highest increase was recorded in the prices of bread and cereals, fruits, vegetables, meat, oil and fats, fish, and potatoes, yam and other tubers. However, on m/m basis, food inflation increased at a faster pace of 1.33%, compared to the 0.91% recorded in the previous month.

Core inflation was 10.7% y/y during the review period, vs. 10.9% in April. Similar to the observed trend in the previous month, the highest increases were reported in the prices of fuel and lubricants for personal transport and transport equipment, vehicle spare parts, medical services, books and stationeries, domestic and household services, hairdressing salons and personal grooming establishment, paramedical services, pharmaceutical products, and passenger travel by road.

On a m/m basis however, the core index increased at a faster pace of 0.98%, 11 bps above the 0.87% reported in April.

However, several analysts that barred their minds on the released inflation figures expressed reservations as economic realities are not salutary to the latest figure.