Why March inflation defied  analyst projections, increases to 24.23 %

Nigeria’s inflation rate climbed to 24.23% in March, marking the first uptick since the recent rebasing and defying analysts’ expectations of a slowdown. The latest Consumer Price Index (CPI) data released on Tuesday by the National Bureau of Statistics (NBS) shows a notable rise from February’s figure of 23.18%.

The outcome of the CPI report contradicts projections of the eight analysts polled by BusinessDay, who projected a moderation in inflation.

According to analysts at CardinalStone, the uptick stemmed from renewed FX pressures, amid heightened global risk-off sentiment that triggered net FPI outflows and increased dollar demand in the local market.

“Consequently, the Naira weakened by 2.4 percent month-on-month over the period. In addition, domestic PMS prices rose across the country, following the temporary suspension of the Naira-for-crude swap arrangement,” it reported.

Core inflation, which excludes volatile food and energy prices, continued its upward trend, climbing to 24.4 per cent year-on-year in March from 23.0 in February.

In contrast, food inflation eased to 21.8 per cent in March, down from 23.5 per cent in the previous month.

On a month-on-month basis, the price pressures were noticeable, with headline,  rising by 3.9 per cent, higher than the 2.0 per cent recorded in February.