Nigeria is expecting to get a rebased economy as the National Bureau of Statistics (NBS) will release the country’s new consumer price index (CPI) and gross domestic product (GDP) on Monday, while the United Kingdom’s monetary policymakers are likely to cut rates despite sticky prices.
“For the CPI, the year was proposed to capture the structural changes driven by the removal of subsidies on FX and PMS.”
Monday
NBS to publish rebased CPI, GDP report.
The National Bureau of Statistics (NBS) is expected to release the new rebased consumer price index (CPI) and gross domestic product (GDP) report today.
According to the NBS, rebasing is a process of updating an old base year with a recent one to reflect changes in the prices of goods and services produced within the economy. The agency explained that constant price estimates are recalculated using the new base year’s prices.
It stated that the rebasing will cover new areas of the economy, including the digital economy, modular refineries, pension fund administration, the national health insurance scheme, mining, among others.
NBS revealed that the base year adopted for the GDP was 2019, while 2024 was used for the CPI.
For the CPI, the year was proposed to capture the structural changes driven by the removal of subsidies on FX and PMS.
The year 2019 was chosen as a preferred base year for the GDP because economic activities were relatively stable within the period, compared to subsequent years disrupted by the impact of COVID and policy shifts. The constituents of the inflation basket are expected to expand from 740 to 960.
Stanbic IBTC to publish PMI report for January
Stanbic IBTC will, on Monday, release Nigeria’s purchasing managers index (PMI), a key indicator that shows the volume of business activities in the country in a particular month compared to the former.
Nigeria’s business activities witnessed a notable rebound in December, marking the first expansion in six months as overall business conditions improved.
The last report showed the headline index increased to 52.7 in December from 49.6 in November, highlighting a renewed confidence in an economy that was, for most of 2024, volatile.
This upward movement indicates a renewed expansion in output, employment, and purchasing activities.
The PMI reading above 50.0 signals an improvement in business conditions, while those below show deterioration.
Read also: What to know as GDP, price index rebased
Wednesday
Kenya’s MPC is to meet for a likely hike in interest rate.
The Kenyan monetary policy committee (MPC) will meet on Wednesday for a likely hike in its key benchmark interest rates as the East African nation’s prices rise.
At the last monetary policy meeting, the Central Bank of Kenya cut the rate by a larger-than-expected 75 basis points to 11.25 percent, saying there was room for looser policy to support economic growth as inflation was under control.
But with inflation edging up to 3.3 percent in January 2025, up from 3 percent in December 2024, the policymakers may resume their hawkish stance in a bid to rein in inflation that spiked in the two months to January after cooling in November.
The CBK had lowered the interest rate three straight times to allow business expansion and stimulate growth. In October, it also cut by 75 basis points (bps) after a 25-bps cut in August.
“Inflation was expected to remain below the midpoint of the target range in the near term, supported by low fuel inflation, stable food inflation, and exchange rate stability,” the MPC said in a statement.
The MPC’s statement observed that short-term rates on government securities had declined sharply in line with its key rate, but it said banks had not responded by lowering their rates proportionately.
“The MPC, therefore, urges the banks to take necessary steps to lower their lending rates in order to stimulate credit to the private sector.”
Thursday
The Bank of England is likely to cut rates despite sticky prices.
Policymakers at the Bank of England are expected to lower its benchmark interest rate when it meets on Thursday even as prices remain below the 2 percent target of the central bank.
Economists expect the BoE to cut its benchmark rate to 4.5 percent from 4.75 percent on Feb. 6, when it will also update its economic growth and inflation forecasts. Investors see a nearly 90 percent chance of a cut next week, according to Reuters.
Persistent UK inflation has already led to fears the bank may keep rates higher for longer, putting pressure on those with significant debt and mortgage holders switching onto more expensive packages after their fixed-rate deals end.
The UK’s latest inflation data for the 12 months to December 2024 showed an increase to the Consumer Price Index of 2.5 percent. This means prices in the UK are still rising at a rate higher than the Bank of England’s target.
In its Monetary Policy Report accompanying its last interest-rate cut in November 2024, the Bank of England said it intended to reduce interest rates further—within reason.
“If inflation remains low and stable, it’s likely that we will reduce interest rates further,” it said.
“But we have to be careful not to cut interest rates too quickly or too much. High inflation has affected everyone, but it particularly hurts those who can least afford it.”
Friday
US to release unemployment rate
The United States Bureau of Labour Statistics will on Friday release the country’s unemployment rate, a data point crucial for the big move of the Federal Reserve on its rate decisions next month.
The jobless rate in the US unexpectedly fell to 4.1 percent in December of 2024 from 4.2 percent in the previous month, below market expectations of 4.2 percent. This is as average hourly earnings rose 0.3 percent from November.
The number of unemployed individuals decreased by 235,000 to 6.886 million, while employment levels increased by 478,000 to 161.661 million.
The Federal Reserve last Wednesday hit pause on interest rate cuts in its first key decision of President Donald Trump’s second term, with Jerome Powell, the Fed chief, saying fears over the job market have faded recently.
“It’s a low-hiring environment,” Powell said. The central bank officials opted to keep borrowing costs at a range of between 4.25 percent and 4.5 percent as they awaited further progress on inflation, which showed signs of stalling out late last year.
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