Headline Inflation Sustains Deceleration

Headline Inflation Sustains Deceleration

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Nigeria’s headline inflation moderated by 18bps to 17.75% y/y in June 2021 (May: 17.93% y/y) – the third consecutive month of decline and the lowest since February 2021 (17.33% y/y). The outturn is 8bps lower than Cordros’ estimate (17.83% y/y) and 5bps less than Bloomberg’s median consensus estimate (17.80% y/y), with the deviation coming from the core basket. On a month-on-month basis, headline inflation increased by 5bps to 1.06%.

For the third consecutive month, food inflation declined by 45bps to 21.83% y/y in June 2021 (May: 22.28% y/y). Notably, the highest price increases were recorded in Bread and cereals, Potatoes, Yam and other Tubers, Milk, Cheese and Eggs, Fish, Soft drinks, Vegetables, Oils and fats and Meat. On a month-on-month basis, food inflation was higher at 1.11% in June (May: 1.05%).

Similarly, core inflation was down by 6bps to 13.09% y/y (May: 13.15% y/y). Pressures were most significant in the prices of Garments, Passenger travel by air and by road, Motor cars and Vehicle spare parts, Shoes and other footwear, Pharmaceutical products, Medical services, Hairdressing salons and personal grooming establishments, Cleaning, repair and hire of clothing, Clothing materials, Other articles of clothing and clothing accessories, Furniture and furnishing and Fuels and lubricants for personal transport equipment. Compared to the previous month, the core index moderated by 43bps to 0.81% m/m in June.



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