(adds comment from analysts)
ABUJA, Nov 15 (Businesshala) – Nigerian inflation eased for the seventh month in October as growth in food and non-food prices slowed, the statistics office said on Monday, one of the reasons for a decision on interest rates by the central bank. Said week ago. ,
Inflation, which has been in double digits since 2016, eased 0.64 percentage points to 15.99% in October, the office said.
Virag Foriz, emerging market economist at Capital Economics, wrote in a note that this slowing would “strengthen the case for policymakers to maintain their benchmark interest rate to support economic recovery.”
Rating agency Fitch said for its outlook on Nigeria to be positive, it needs to see, among other factors, a sustainable and sustained moderation in the inflation rate towards the central bank’s target of 6-9%.
Food price inflation, the major key component, declined 1.23 percentage points to 18.34% in October, the statistics office said. Core inflation, excluding prices of agricultural products, rose 2.10 percentage points to 13.24%.
The government has said that persistent inflationary pressures are structural – linked to deficits and not just money supply issues – and are largely imported.
“Given these structural factors, it would be premature for anyone to give a clear indication on Nigerian inflation,” said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered.
Nigeria imports a number of major goods and services. The dollar shortage has prompted the government to impose restrictions on foreign exchange for some commodities, keeping prices under pressure.
Mari Pangetu, the World Bank’s managing director of development policy and partnerships, told Businesshala on Friday that macro-economic stability was critical to solving Nigeria’s development issues and getting the naira’s exchange rate in the “right place” .