Nigeria’s August Inflation Seen at 15.3%-15.94% Despite Continued Disinflation

Nigeria’s headline inflation rate is expected to remain elevated in August despite recording two consecutive months of disinflation, with analysts projecting the rate between 15.3% and 15.94%.

The forecasts place August headline inflation within a range of 15.3% to 15.94%, compared with the 15.43% recorded in July.

While the expected range includes a possible increase from July’s figure, analysts note that the movement would not necessarily signal a renewed acceleration in underlying price pressures.

Harvest Season Could Ease Food Inflation

The ongoing harvest season is expected to provide some relief to food prices as increased supply of agricultural produce helps moderate food inflation.

However, analysts expect elevated petrol and diesel prices, base effects and other cost pressures to limit the pace of disinflation during the month.

These pressures could keep headline inflation relatively sticky even as some components of the consumer price basket experience slower monthly price increases.

Base Effects Remain Key to August Inflation

The projected increase in annual inflation is also expected to reflect the impact of base effects rather than a significant acceleration in the underlying monthly pace of price increases.

This means that while prices may continue to rise at a slower month-on-month rate, the comparison with price levels from the corresponding period of the previous year could push the annual headline figure higher.

The August inflation data will therefore provide further insight into whether Nigeria’s recent disinflation trend is becoming more entrenched or is being temporarily constrained by higher energy costs, food-price dynamics and statistical base effects.