Financial analysts have projected that May 2019 inflation rate may rise to the highest level since the beginning of the year.
They also said that increase in inflation rate would not be good news for the economy or the purchasing power of Nigerian.
FSFH Nigeria research group in its current report forecast that the May inflation rate will further increase marginally to 11.39 per cent from 11.37 per cent recorded in April 2019.
The group in addition projected that, the month-on-month change in the Consumer Price Index (CPI) to increase by 1.10 per cent in May 2019, the highest since January 2019.
According to the report “If FSDH Research’s May 2019 inflation rate forecast comes true, Nigeria may record the highest inflation rate figure since January 2019. That would not be good news for the economy or the purchasing power of Nigerians.”
The FSDH Nigeria economy 386 views reporting people saying that they will not appreciate a situation where the prices of consumer goods increase faster than the expected increase in the approved National Minimum Wage.
The report explained that with the onset of the rainy season, there is upward pressure on the food component of the inflation basket.
The report further said the major driver of the expected rise in the inflation rate is the increase in food prices, due to the seasonality effect typically associated with the onset of the planting season, adding that security challenges in some food producing regions inNigeria reduce the supply of food items, leading to an increase in prices.
The current inflation rate is higher than the six per cent – nine per cent target set by the Central Bank of Nigeria (CBN). It is believed that given current realities, the inflation rate will remain above the CBN’s target in the short-to-medium-term and this may reduce the real
yield on xed income securities.
The price monitor, the FSDH Research conducted on certain food and non-food items in May 2019 shows that most prices increased in May compared with April.
One of the ways to reduce Nigeria’s inflation rate in a sustainable manner FSDH notes, is to improve the infrastructure in the country, stressing that good transport network, good storage facilities, measures to increase farm yields, provision of securities and strategies to ensure linkage between the farmers and the industrial sector will increase the supply of food items, increase profit margin and lower the inflation rate.