Recent data released by the Nigerian Bureau of Statistics shows that the July 2019 annual inflation rate has fallen to 11.08 percent.
It was a year-on-year decline from 11.22 percent in June 2019, printing two consecutive months of decline.
This is also as core inflation moderated further into single digit 8.80 percent y-o-y in July 2019 from 8.84 percent in June 2019 on the back of decline in transport (-0.18%) and energy (-0.05%) costs.
Also, core inflation rate slowed on a monthly basis to 0.77% (from 0.85% in June).
The recent southward movement in the annual inflation was driven by the decreases in annual food and core inflation rates.
Specifically, annual food inflation rate slowed to 13.39 percent in July 2019 from 13.56 percent in June 2019.
Also, monthly food inflation slowed m-o-m to 1.26 percent in the month of July from 1.36 percent in the month of June despite the worsened insecurity challenges in the country in recent times as well as the anticipated decline in food stockpiles which is usually the case during the planting season.
An analysis of the inflation report revealed that the inflation rate in some states currently experiencing
relatively worsened insecurity fell.
Kaduna printed 14.03 percent from 17.50 percent and Zamfara 14.92 percent from 15.42 percent.
However, y-o-y change in price level for imported food increased by 0.64 percent as naira depreciated against the dollar in most FX market segments, especially at the interbank window where monthly average foreign exchange rate rose (i.e naira depreciated) y-o-y by 8.37 percent to N357.62/$ in July 2019.
According to analysts at Cowry Asset Management, imported food inflation rate is expected to further rise as demand pressure on the naira persist amid the recent outflows of foreign portfolio investors and declining crude oil prices engendered by the continuing trade war between US and China.