Grapevine

Analysts project inflation to slow down in July

The NBS data indicated that the headline inflation rate rose higher in June to 34.19 per cent up from 33.95 per cent in May, due to higher food prices, particularly for cereals and wheat.

Analysts have said that several factors, including the ongoing insecurity in food-producing regions, the continued depreciation of the naira, and challenges in the country’s food sector contributed to the hike.

As of June, food inflation stood at 40.87 per cent.

“On a year-on-year basis, it was 15.62 per cent higher compared to the rate recorded in June 2023 (25.25 per cent). The rise in food inflation on a year-on-year basis was caused by increases in prices of the following items: millet whole grain, garri, guinea corn, etc. (bread and cereals class), yam, water yam, coco yam (potatoes, yam & other tubers class), groundnut oil, palm oil, etc. (oil & fats class) and catfish dried, dried fish-sardine, mudfish (fish class), etc.,” the NBS report partly said.

Projecting a slowdown, a Senior Financial Market Analyst with FXTM, Lukman Otunuga, said, “One of the key themes in Nigeria in 2024 has been runaway inflation, which jumped to 34.19 per cent in June – its highest level since 1996. However, the incoming CPI print is expected to show prices slowing in July, cooling to 33.95 per cent compared to 34.19 per cent in the previous month.”