The latest report from the NBS has headline inflation y/y at 11.3% in November. This uptick is very modest compared with October, by just 2bps on this occasion. Food price inflation rose by 2bps to 13.3% y/y while the core measure declined by -11bps to 9.8%. Our expectation, shared with the wire services, was 11.5% y/y for the headline measure.
In November, m/m inflation was 0.8%, compared with 0.7% recorded in the previous month. The pattern for food prices was similar, with an increase from 0.8% to 0.9%.
Similar to the past three months, core inflation remained at single-digit level. The bureau’s report noted that price pressures were particularly high for fuels and lubricants, personal transport as well as for medical services.
The report also tracks inflation by state, with the highest (13.0% y/y) in Taraba and Rivers, and the lowest (8.7%) in Kwara. However, it cautions that household baskets vary across states. Edo state’s food price inflation of 16.5% y/y was the highest of all states.
|Consumer price inflation (% chg y/y)National Bureau of Statistics (NBS); FBNQuest Capital Research|
In its latest meeting held in November, the MPC observed that the near-term upside risks to inflation remained: the disruption to agricultural production and distribution arising from flooding, insurgency in the North-East, high cost of energy, anticipated spending in the run-up to Christmas festivities and campaign-related spending towards the upcoming 2019 general elections.
Our view is similar to the CBN/MPC. Looking ahead to December, we see inflation at 11.8% y/y.