FDC Says Spike In Prices Will Persist, Projects Inflation At 23.35%

Financial Derivatives Company Ltd (FDC) has said that Nigeria’s high inflation rate will linger considering current economic realities.

The FDC projected inflation to hit 22.35 per cent when the National Bureau of Statistics (NBS) releases its July report.

The company made the projection in its recently published economic bulletin.

The NBS had released its consumer price index report which placed Nigeria’s inflation at 22.79 per cent in June, 2023.

According to the FDC report, Nigerians should expect inflation figures to rise by 0.56 percent to 23.35 percent in July, 2023 from 22.79 per cent in the previous month.

The rise would be the seventh consecutive monthly increase and the country’s highest inflation rate since 2005.

The FDC linked the rise to the recent removal of fuel subsidy by the Bola Tinubu-led Government and the recent floating of the naira by the Central Bank of Nigeria.

When the Tinubu-led government removed subsidy payment on petroleum import, the price of fuel rose from N190 per litre to N619 per litre in July.

This jerked transportation costs and the cost of energy for manufacturers in the country.

Also, the floating of the naira led to the depreciation of the currency from around N480 per dollar to N781 per USD at the Investors’ and Exporters’ FX Window on August 10.

FDC further projected food inflation to rise by 0.33 percent to 25.58 percent while core inflation is projected to increase by 0.22 percent to 20.49 percent.

It added, “This indicates that inflation in Nigeria is not only transient but is structural. It will therefore take time before it will begin moderating sustainably.’’