• Tuesday, July 16, 2024
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NBS sees 2015 inflation in single digit despite intense pressure on naira

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The National Bureau of Statistics (NBS) says it sees Nigeria’s inflation stay in single digit, precisely 8.8 percent in 2015 even as pressure continues to mount on the naira. The NBS also foresees prices remaining moderately stable over three-year period to 2017, with inflation averaging 8.13 percent. According to the bureau, pressure on inflation rates are likely to be caused by the recent depreciation of the naira, and not increased spending during the elec- tion period as widely specu- lated. “Some have speculated that there are likely to be in- creased pressures on prices as a result of the election period. A review of the historical time series in the current democratic dis- pensation reveals that this is unlikely to be the case,” the NBS states in its latest Economic Review and 2015 – 2017 Outlook. In the previous four elec- tions of 1999, 2003, 2007 and 2011, only one elec- tion year actually had an increase in the inflation index, the bureau notes, admitting, however, that lagged effects may exist as the headline index was higher the year after the election in all cases. “Nevertheless, upward pressure on inflation rates are likely to be caused by the recent depreciation of the naira,” it adds. It says that although the decline in crude oil prices may weigh on the value of oil exports, the recent de- preciation of the local cur- rency is expected to bode well for non-oil exports. The depreciation also means that imports are likely to be more expensive and are likely to slow going forward. The value of total trade is projected to increase by 9.66 percent in 2015, and average 5.05 percent over the forecast period. Headline inflation opened at 8 percent in 2014 and remained below or equal to this figure until June. The slowest price increases were recorded in February, when headline rate was reported at 7.7 per- cent, but peaked in August with prices rising by 8.5 percent – the highest value recorded for the year. The pace of price in- creases began to slow be- yond August, settling at 8 percent in December. The slowed movement in prices was as a result of slower increases in both the food prices driven by bumper harvests as well as a slower increase in items that contribute to the core sub-index.