For the 16th consecutive time, Africa’s largest economy, Nigeria said its headline inflation dropped to 11.61% for the month of May.
Data released by the official statistics office, the National Bureau of Statistics, the Consumer Price Index (CPI) which measures inflation increased by 11.61 percent (year-on-year) in May 2018.
This is 0.87 percent points less than the rate recorded in April 2018 (12.48) percent and represents the sixteenth consecutive disinflation since January 2017.
The data showed that on a month-on-month basis, the Headline index increased by 1.09 percent in May 2018, up by 0.26 percent points from the rate recorded in April 2018.
The percentage change in the average composite CPI for the twelve months period ending May 2018 over the average the average of the CPI for the previous twelve months period was 14.79 percent, showing 0.41 percent point lower from 15.20 percent recorded in April 2018.
There are signs that Nigeria’s economy has fully recovered from the recession it entered in 2016, however, there are signs that the Central Bank of Nigeria, CBN, would not be cutting interest rates anytime soon.
For several reasons, Nigeria’s 2018 budget has not been passed. There are indications that the government would spend more in the next six months as a result of the coming national elections. This is expected to increase liquidity in the system which could trigger inflation.
Analysts concur that a further slow down in inflation towards a double-digit region is good for the economy.