(Bloomberg) -- Nigeria’s annual inflation rate climbed for the first time in three months in September, stoked by a spike in gasoline prices and severe floods in food-producing areas.
Consumer prices rose 32.7% from 32.2% in August, the National Bureau of Statistics said in a statement published on its website on Tuesday. Exceeding the median estimate of nine economists in a Bloomberg survey of 32.4%.
Haulage and passenger fares surged in early September after gasoline prices were increased 45%. Floods in the north led to a jump in corn, yam and cassava tuber prices after crops that the United Nations’ Food and Agriculture Organization estimates would have fed 8.5 million people for six months were destroyed.
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Food inflation quickened to 37.8% in September from 37.5% a month earlier. Core price growth, which excludes agricultural produce and energy, slowed to 27.4% from 27.6%.
The Central Bank of Nigeria lifted its benchmark interest rate by 50 basis points last month to 27.25%, in a preemptive move to tame the impact of the price pressures on inflation and may hike again when the monetary policy committee meets Nov. 25-26.
What Bloomberg Economics Says...
“Nigeria’s inflation will likely quicken for another couple of months, after a higher-than-expected increase in September. After that, we expect policy tightening to return it on a downward trajectory. We now expect annual inflation to remain above 30% through at least early 2025. Policymakers will likely try to tamp down prices with rate hikes over the next two quarters, halting when positive real rates are restored.”
— Yvonne Mhango, Africa economist. Click here to read more.
Governor Olayemi Cardoso said at last month’s meeting that “efforts must be sustained” to achieve a positive inflation-adjusted interest rate to attract investment into the economy which would help support the naira.
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--With assistance from Simbarashe Gumbo.
(Updates with chart and comment from Bloomberg Economics)
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