Nigeria's Inflation Rate Holds Steady

(Bloomberg) -- Consumer price inflation in Nigeria was 11.4% year-on-year in May, in line with the consensus forecast and the same as in April, the Abuja-based National Bureau of Statistics said in a report published Monday on its website.

Month-on-month, prices in Africa’s biggest oil producer increased 1.1%, quicker than the pace of 0.2% in April.

The food sub-index rose 13.8% year-on-year in May, compared with 13.7% a month earlier.

Key Insights:

• The central bank in May said that it sees inflation moderating in the second half of the year. Consumer prices have hovered around 11% in the past year, which is above the central bank’s target of 6%-9%
• Insecurity in the country’s food-producing regions has disrupted farming and causing food shortages.
• The Central Bank of Nigeria cut rates in March but kept them on hold at 13.5% in its subsequent meeting in May amid concern that a 67% increase in the minimum wage could stoke more inflation. Bloomberg Economics expects a rate cut later this year.
• The country’s gross domestic product grew 2.01% in first quarter, lower than 2.38% in the previous quarter. The central bank’s monetary policy committee forecasts 2.34% growth in the second quarter and 2.36% in the third.

To contact the reporters on this story: Anthony Osae-Brown in Lagos at aosaebrown2@bloomberg.net;Ruth Olurounbi in Abuja at rolurounbi4@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Paul Wallace, Alastair Reed

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