Headline inflation accelerated by 0.84% to 18.60%-NBS

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The National Bureau of Statistics (NBS) released the June inflation report this morning on July 15, 2022. According to the data reported, the official headline inflation accelerated by 0.84% to 18.60%, in line with our forecast (18.40%). This is the fifth consecutive increase in the headline inflation rate since February (cumulative increase of 2.9%), and the highest inflation level in 5-years, it disclosed.

“Inflation is being driven by a combination of factors, mainly the surge in the price of diesel adding that Diesel is a major fuel for powering generators and food delivery trucks.

The report stressed that In addition to energy costs is the falling value of the naira in the forex market.

KEY TAKEAWAYS

Headline inflation is the raw inflation figure reported through the Consumer Price Index (CPI).

The CPI determines inflation by calculating the prices on a fixed basket of goods.

Core inflation removes the CPI components that can exhibit large amounts of volatility from month to month.

There has been a general increase in prices the world over, therefore, the response so far has been a tightening of monetary policy in most countries.

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CBN to hike rates by at least 50bps

The report have it that the Central bank of Nigeria (CBN) is widely expected to hike interest rates at its next policy meeting scheduled for July 18 & 19. This would be in line with international trends and align with the CBN’s mandate to fight inflation, it stated.

It contained that impact of June’s inflation numbers on the economy.


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