Analysts Predict 30.95% Inflation For September

Nigeria’s inflation is likely to fall for the third straight month to 30.95 percent this month from 32.15 per cent in August, analysts at Cowry Asset Management Limited have said.

The analysts made the prediction while commenting on the inflation report, released by the National Bureau of Statistics (NBS) last Monday, which showed that after falling for the first time in nineteen months to 33.4 per cent in July 2024, inflation also declined in August.

According to the analysts, increased food supply from the ongoing harvest season will help to soften inflation. The analysts said: “Cowry Research notes a favourable downward shift in both headline and food inflation trends, signaling a significant change in the inflation trajectory.

The moderation is driven by the CBN’s aggressive monetary policy, with interest rates now elevated to 26.75 per cent, coupled with government measures aimed at stabilizing food prices.

“Although challenges like the removal of fuel subsidies and continued naira depreciation have exerted inflationary pressure, strategic policy interventions have helped to mitigate some of the adverse effects.

Looking ahead, inflation is projected to ease further in September to 30.95%, as increased food supply from the ongoing harvest season is expected to relieve some of the economic strain caused by rising prices.”

In a recent report, Financial Derivatives Company (FDC) Limited projected that Nigeria’s inflation rate is likely to drop to 28 per cent before the end of the year.

The firm said the expected decline in inflation before the end of the year will positively impact the value of the naira, “as currency appreciation is directly proportional to inflation.”

As the financial advisory firm put it, “the naira will begin to appreciate when inflation tapers, as currency appreciation is directly proportional to inflation. “Inflation is likely to decline to 28 per cent before the end of the year and by then, the naira is likely to trade between N1200/$ – N1300/$.”

New Telegraph reports that in its latest Nigeria Economic Outlook, released in June, professional services firm, PricewaterhouseCoopers (PwC Nigeria), forecast that Nigeria’s headline inflation may decline marginally to 29.5 per cent by the end of the year.