Nigeria’s annual inflation rises to highest level since 2005

By Chijioke Ohuocha

ABUJA (Reuters) – Nigeria’s annual inflation quickened in July to its highest degree since 2005, official knowledge confirmed on Monday, pushed by worth rises for meals, gas and clothes.

The Nationwide Bureau of Statistics (NBS) mentioned inflation rose for the sixth straight month, hitting 19.64% from 18.60% 12 months on 12 months in June.

NBS knowledge confirmed the July inflation studying was the very best since not less than the beginning of 2009.

Refinitiv knowledge confirmed it was the very best for the reason that 24.32% recorded in September, 2005.

Inflation has been in double digits in Africa’s greatest financial system since 2016, fuelled partly by a weakening of its naira foreign money.

Meals costs have been up 22.02% 12 months on 12 months in July, attributable to will increase in costs of bread and cereals, potatoes, yam, meat, fish, oil and different gadgets.

Core inflation, which excludes costs of farm produce, was up 16.26% from the identical interval final 12 months, with fuel, liquid and strong gas, transportation by street and air, clothes and rent of clothes amongst contributing components.

Rising inflation and the state of the financial system are main points because the nation heads for a nationwide election in February, when voters will select a brand new president as incumbent Muhammadu Buhari steps down.

The naira foreign money has been weakening on the parallel market on account of a shortage of international foreign money since July 2021, when the central financial institution stopped foreign exchange gross sales to retail foreign money merchants to ease strain on reserves and help the official market.

The transfer funnelled demand in the direction of the unofficial market, the place the foreign money is freely traded.

Policymakers argue persistent inflationary pressures are structural and largely associated to imports.

Analysts at Capital Economics mentioned in a analysis notice that Nigeria’s inflation was in all probability not removed from its peak however would stay elevated.

They predicted one other rate of interest improve on the central financial institution’s subsequent coverage assembly in September.

(Reporting by Chijioke Ohuocha, Enhancing by Alexander Profitable and Ed Osmond)