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Inflation Forecast
for July 2021
The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for July 2021 on August 16, 2021, based on the data release calendar available on the Bureau’s website.
Access Bank’s Economic Intelligence Unit forecasts headline inflation for July 2021 to fall to 17.62% from 17.75% recorded in June 2021, marking a downward tick for a five- months low. This indicates a continuous decline in prices as a result of base effects. The base effect implies that the large upswing in the customer price index (CPI) for July 2020 as a result of the covid-19 economic lockdowns is now the base number
(denominator) for calculating inflation rate for July 2021. Our methodology entails the application of an autoregressive econometric model using lags of the composite consumer price index (CPI) and a survey-based inflation expectation within the same product definitions adopted by the NBS.
Food prices continued to nudge higher due to the festive season coupled with security concerns particularly from food basket states in the North. Given this pattern, we expect the CPI to settle at 388.30 points from 383.96 points in the preceding month.
Inflation Forecast for July 2021
12.82% 13.22% 13.71% 14.23% 14.88% 15.75% 16.64% 17.33% 18.11% 18.91% 17.93% 17.75% 17.62%
2020 2021
Inflation Forecast Drivers
Price increases emanated majorly from the festive season and currency depreciation from speculations due to the residual effect of the CBN circular on the ban of sale of dollars to Bureau De Changes.
• The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window by 0.44/US$ to
N411.10/US$ from N410.66/US$ in the previous month. In the same vein, it depreciated at the parallel market by N17/US$ to N520/US$ as at July 30th from N503/US$ in
the prior period.
Prices of food and non-alcoholic beverages, the largest component in the consumption basket (with a weight of 51.8%) witnessed surge in prices; some of which include beans (100.7%), tomatoes (77.8%), pepper (76.7%), mackerel fish (59.2%), yam (45%), vegetable oil (2.5%) and rice (2.3%) while a few others saw price decline such as mangoes (16.7%), garri (6.1%) and gas (2.1%).
PAGE 17 INSIDE ACCESS | AUGUST 2021 4TH EDITION
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