By Elizabeth Adegbesan
Financial Derivative Company (FDC) has projected further decline in the inflation rate to 11.2 percent in March from 11.3 percent in February.
The inflation rate declined for two consecutive months from 11.44 percent in December to 11.31 percent in February, according to data from the National Bureau of Statistics (NBS).
“Nigeria’s headline inflation is expected to slide again to 11.2 percent in March from 11.31 percent in February”, said FDC in its bi-monthly economic bulletin released yesterday.
Explaining the basis for its projections, the Lagos based company said: “If our projections are accurate, it will be the third consecutive monthly decline. The sustained moderation in the general price level can be partly attributed to the continuous fall in food prices.
“The CBN’s aggressive liquidity mop-up through the stabilization securities and OMO activities is also expected to reduce money supply, as maturing bills were N2.04 trillion lower than new issues. “Also supporting the moderating trend is the stability in the exchange rate. At the parallel market the exchange rate traded flat at N360 per dollar.
“Similarly, our forecast also points to a decline in the month-on-month inflation (which is more reflective of current prices). The index is expected to taper to 0.72 percent (8.97 percent annualized) from 0.73 percent (9.16 percent annualized) in February.
“The movement in output parameters also supports a decline in inflation rate. The Purchasing Managers Index (PMI), which measures the health of the manufacturing sector, expanded by 12.89 percent to 56.9 points in March. There was an increase in inventory build up as manufacturers stocked up ahead of the Easter celebrations.
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