Nigerian inflation dropped for the 18th consecutive time 11.23 per cent in June to 11.14 per cent in July, 1.28 per cent points below Federal Government’s projection.
The Federal Government had in its 2018-2020 Medium Expenditure Framework and Fiscal Strategy projected inflation of 12.42 per cent for the period.
In its latest report released yesterday in Abuja, the National Bureau of Statistics (NBS) indicated that the Consumer Price Index (CPI) which measures inflation declined by 0.09 per cent in July, 18th consecutive reduction in inflation since January 2017.
The report showed that urban inflation rate reduced on a year-on-year basis to 11.66 per cent in July 2018 from 11.68 per cent recorded in June 2018, while the rural inflation rate remained flat at 10.83 per cent for the two months.
On month-on-month basis, the headline index increased by 1.13 per cent in July 2018, down by 0.11 per cent points from 1.24 per cent recorded in June 2018; representing the first month on month headline inflation decline since February 2018.
The report indicated that the percentage change in the average composite CPI for the 12-month period ending July 2018 over the average of the CPI for the previous 12-month period was 13.95 per cent, showing 0.42 per cent point from 14.37 per cent recorded in June 2018.
The sustained improvement in inflation may pressure the Central Bank of Nigeria (CBN) to consider a cut in the benchmark interest rate. The apex bank has rebuffed clamour for reduction and sustained the Monetary Policy Rate (MPR) at 14 per cent, citing inflation and fragile macroeconomic environment.
Many analysts expected the inflation to continue on the decline, although the possibility of the rate hitting the apex bank’s target of between six and nine per cent is slim.