Financial analysts have said inflation rate will remain in single digit throughout 2013, pointing out that forecast projects the rate to be below nine per cent for the remaining period of the year.
Analysts at FSDH Merchant Bank Limited, in a report made available to our correspondent on Tuesday, said, “Our revised average inflation rate forecast for 2013 is 8.4 per cent. It is expected that the short end tenor of fixed income securities will react to the increase in the inflation rate in the short term. The reaction will be in the area of increase in yields while prices drop.”
The rate of inflation in the country rose to 9.1 per cent in April from 8.6 per cent in March, according to the Consumer Price Index Report released by the National Bureau of Statistics last week.
The report attributed the rise in inflation to “higher price levels of food products due to the effect of declining inventories.”
The inflation rate fell below 10 per cent in January, meeting the Central Bank of Nigeria’s target, as the impact of last year’s higher fuel prices waned.
The analysts had earlier said the price movement in the consumer goods in April would increase the Consumer Price Index to 144.83 points, an increase of 0.58 per cent month-on-month, adding that the increase in the CPI in April would produce an inflation rate (year-on-year) of 9.1 per cent, representing 50 basis points increase from March 2013 inflation rate.
The report stated, “The April CPI will have to decrease by at least 0.001 per cent from March to produce an inflation rate that is lower than 8.6 per cent reported in the month of March 2013. In our opinion, this is unlikely in the face of increases in the prices of items in the Food and Non-Alcoholic Index.”