March Inflation Review - Annual inflation tracks Vetiva estimate, hits 2-year low
Nigeria’s March 2018 Inflation registered at 13.3% year-on-year (y/y), in line with Vetiva forecast and slightly below Consensus expectation of 13.6% y/y. Coming from 14.3% in the previous month, headline inflation has now dropped to a 2-year low on the back of base effects from high 2017 inflation. Across the sub-indices, Core Inflation moderated further (11.7% y/y to 11.2% y/y) whilst Food Inflation recorded another sizable drop (17.6% y/y to 16.1% y/y) due to much stronger base effects. Likewise, underlying inflation (excl. volatile food and energy prices) clocked in at 11.8%, below the 12% mark after 10 months of stickiness above that level. The month-on-month (m/m) increase in overall prices remained sticky, albeit just above the 6-month range (0.75%-0.80%) at 0.84%, driven by marginally higher m/m Food (0.90%) and Core (0.84%) Inflation.
Our overall inflation outlook is little changed, even as we note the slight uptick in previously sticky m/m inflation. Although our expectations remain the same, our April forecast adjusts to 12.6% y/y (previous: 12.5%) after we update the base with these March numbers. This would bring average full-year inflation to 12.1% (previous: 12.0%).
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