Nigeria Inflation September 2020


Nigeria: Inflation quickens to over two-year high in September

October 14, 2020

Consumer prices climbed 1.48% over the previous month in September, above the 1.34% rise logged in August. September’s reading marked the sharpest increase in over three years and was primarily driven by quicker price growth for food.

Inflation jumped from 13.2% in August to 13.7% in September, marking the highest reading since February 2018. As a result, it moved further above the Central Bank’s target range of 6.0%–9.0%. Meanwhile, annual average inflation edged up to 12.4% in September (August: 12.2%).

Moreover, core consumer prices, which exclude volatile agricultural produce, rose 0.94% over the previous month in September, decelerating from August’s 1.05% increase. Lastly, core inflation ticked up to 10.6% from 10.5% in the previous month.

Commenting on the drivers behind the acceleration in inflation seen since the start of the year, Dylan Smith and Andrew Matheny, economists at Goldman Sachs, noted:

“The primary source of inflationary pressure this year has been pass-through from the recent FX depreciation of the official and formal (NAFEX) Naira exchange rates, compounded by official FX restrictions and undersupply of foreign exchange. This has pushed transactions into the parallel market, where the exchange rate is significantly weaker. The removal of a long-standing official fuel subsidy in April has also contributed to inflation linked to import prices in recent months”.

FocusEconomics Consensus Forecast panelists expect inflation to average 13.7% in 2021, which is up 1.1 percentage points from last month’s forecast. In 2022, inflation is seen averaging 11.7%.


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Nigeria Inflation Chart

Nigeria Inflation September 20 20

Note: Month-on-month and year-on-year changes of consumer price index in %.
Source: National Bureau of Statistics (NBS) and FocusEconomics calculations.

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