Nigeria Inflation Expanded by 40bps to 13.22% in August 2020

The outturn is 13bps higher than Cordros’ (13.09% y/y) estimate, owing to a negative surprise from food inflation and 25bps higher than Bloomberg consensus (12.97% y/y) estimate. Month-on-Month, headline inflation increased by 9bps to 1.34%, the highest level since June 2017.

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Food inflation rose by 52bps to 16.00% y/y in the period under review. We believe banditry and flood cases in the food producing regions of the country, as well as the exchange rate adjustment negatively influenced the food basket.

Pertinently, the rise in the food index was caused by increases in prices of Bread and Cereals, Fish, Potatoes, Yam and other tubers, Meat, Fruits, Oils and fats, Fruits and Vegetables. From a month ago, food inflation expanded by 15bps, to 1.67% m/m.

Elsewhere, core inflation was up by 42bps to 10.52% y/y. Pressures were most significant in the prices of Passenger transport by air, Hospital services, Medical services, Pharmaceutical products, Maintenance and repair of personal transport equipment, Vehicle spare parts, Motor cars, Passenger transport by road, Miscellaneous services relating to the dwelling, Repair of furniture and Paramedical services. Compared to July, the core index was up by 30bps to 1.05%, the highest since June 2017.