Analysts at the First Securities Discount House (FSDH) says their inflation watch research shows that the country is expecting a marginal drop in the inflation rate for the month of March 2019.
Commenting on the research, the FSDH said the inflation rate is likely to crash to 11.29 percent from 11.31 percent recorded in February 2019.
According to the FSDH, this expected decline is supported by the slight drop in food prices and other major items that make up the Consumer Price Index (CPI) basket (alcohol beverages, clothing and footwear, housing, water, electricity, gas and other fuels and etc.).
“As the rainy season approaches, we expect an increase in the prices of food items, particularly vegetables.
“A declining inflation rate is a good development for the Nigerian economy, but we note that the main factors that will ensure the inflation rate drops to a single digit, which is the target of the CBN, are outside the control of the CBN.
“The poor infrastructure in Nigeria, high energy costs, insecurity in some parts of the country and excessive reliance on crude oil as the major source of revenue and foreign exchange earner are the major drivers of inflation in Nigeria.
“Our preliminary checks also suggest that imported inflation rate (i.e. prices of goods using imports as raw materials) lessened in March. The marginal appreciation in the value of Naira in March compared with the relative stability in the prices of food items on the international market provided a gain on the prices of consumer items in Nigeria,” it said.
The value of Naira at the end of March compared to February also strengthened by N0.66 due to the increase in the global price of crude oil in March.