FDC predicts drop in Nigeria’s inflation rate

Nigeria’s inflationary rate for March, 2019 has been projected to stand at 11.2 percent by the Lagos based Financial Derivatives Company, FDC.

According to the National Bureau of Statistics, NBS, the inflationary rate for February, 2019 stood at 11.3 percent. The February rate made it the third consecutive months it will be declining.

FDC said on Monday UN its bi-monthly economic bulletin: “Nigeria’s headline inflation is expected to slide again to 11.2 percent in March from 11.31 percent in February.”

Speaking on the basis for its prediction, FDC said: “If our projections are accurate, it will be the third consecutive monthly decline. The sustained moderation in the general price level can be partly attributed to the continuous fall in food prices.

“The CBN’s aggressive liquidity mop-up through the stabilization securities and OMO activities is also expected to reduce money supply, as maturing bills were N2.04 trillion lower than new issues.

“Also supporting the moderating trend is the stability in the exchange rate. At the parallel market the exchange rate traded flat at N360 per dollar.

“Similarly, our forecast also points to a decline in the month-on-month inflation (which is more reflective of current prices). The index is expected to taper to 0.72 percent (8.97 percent annualized) from 0.73 percent (9.16 percent annualized) in February.

“The movement in output parameters also supports a decline in inflation rate. The Purchasing Managers Index (PMI), which measures the health of the manufacturing sector, expanded by 12.89 percent to 56.9 points in March. There was an increase in inventory buildup as manufacturers stocked up ahead of the Easter celebrations.”