Minister of Finance, Ngozi Okonjo Iweala
Analysts at FSDH Securities Limited have predicted a drop in inflation rate from 12.8 per cent in July to 11.8 per cent in August.
The research and investment firm stated this in a report made available to THISDAY Tuesday.
The National Bureau of Statistics (NBS) is expected to release the inflation figure for August today. Inflation rate for July stood at 12.8 per cent, a marginal drop from 12.9 per cent recorded in June.
Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, had also projected a slide in inflation rate to 12.4 per cent in August.
This has been largely attributed to a tight monetary policy stance adopted by the Central Bank of Nigeria (CBN).
According to FSDH, an analysis of consumer prices monitored across the country in August showed that price of tubers and vegetables dropped due to the harvest season, especially yam.
“However, the price of rice monitored showed an increase of about 2.04 per cent between July and August 2012. It is worthy to note that, rice accounts for about 9 per cent of total household expenditure in Nigeria.
“Prices of maize and wheat also increased over July figures, while price of bread remained the same. FSDH Research is of the opinion that inflation rate in the month of August 2012 should moderate downwards due to the overwhelming effect of positive factors as mentioned above,” the firm added.
It estimated that the Composite Consumer Price Index (CCPI) would increase by 78 basis points to 136.8 points in August. This it argued would produce an inflation rate of 11.8 per cent in, 100 basis points lower than the 12.8 per cent recorded in July.
FSDH pointed out: “The decrease in the CCPI would be influenced by the strength of the appreciation in the value of the naira against the US dollar between July and August, decrease in the price of tubers and vegetables, as well as the effects of improved power supply on consumption expenditure; over the observed negative impact of increase in rice, maize and wheat prices.”