Nigeria Consumer Prices (Jun.)

The latest drop in Nigeria’s headline inflation rate, to 17.8% y/y in June, is likely to reassure policymakers that price pressures are softening and that policy tightening is not necessary to curb inflation. We think that monetary policy settings will remain unchanged over our forecast horizon.
Virag Forizs Emerging Markets Economist
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South Africa Consumer Prices (Sep.)

Although South Africa’s headline inflation rate picked up to 5.0% y/y in September, soft underlying price pressures and a fragile economic recovery mean that policymakers will only normalise monetary policy gradually. By contrast, investors currently appear to expect a relatively aggressive tightening cycle.

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Africa Data Response

Nigeria Consumer Prices (Sep.)

The drop in the headline inflation rate in Nigeria, to 16.6% y/y in September, will ease pressure on the central bank to raise rates and allow policymakers to focus on supporting the economic recovery.

15 October 2021

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South Africa’s hard activity data for May painted a picture of a bumpy recovery in Q2, as retail sales grew strongly but industrial sectors showed signs of weakness. With tighter virus containment measures and, more recently, violent unrest, the economy is likely to go downhill in Q3.

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Africa Data Response

Nigeria Consumer Prices (May)

The second consecutive drop in Nigeria’s headline inflation rate, to 17.9% y/y in May, will probably go some way towards easing policymakers’ recent concerns about high and rising inflation. While we expect inflation to remain well above the central bank’s target for the foreseeable future, the MPC is likely to keep interest rates unchanged over the coming years.

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Nigeria’s government has turned to the central bank to plug ever larger budget deficits in recent years and policymakers are unlikely to kick their deficit monetisation habit, particularly if the fiscal position worsens next year (as we expect). This will deepen some of Nigeria’s existing economic woes, including high inflation, downward pressure on the naira and weak economic growth.

14 June 2021
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