Bloomberg News

Nigeria Inflation Accelerates First Month in Four to 10.3%

October 14, 2011

(Updates with comment from analyst in fourth paragraph.)

Oct. 14 (Bloomberg) -- Nigeria’s inflation rate rose for the first time in four months to 10.3 percent in September as the government raised spending and a weaker naira boosted import costs.

Inflation accelerated from 9.3 percent in August, the National Bureau of Statistics said in a statement today in Abuja, the capital. The median estimate in a Bloomberg survey of four economists was 9.7 percent. Prices rose 1.4 percent in the month.

The central bank of Africa’s biggest oil producer has raised its benchmark interest rate 6 percentage points to 12 percent over the past year, including a 275 basis point increase this week to curb inflation and support the naira. Price pressures may increase as the government prepares to remove a fuel subsidy next year and raise spending by 7 percent after doubling the minimum wage for state workers in August.

The medium-term risks to inflation stem from the “possible deregulation” of the price of refined fuels starting next year and “the sustainability of the exchange rate target” of the central bank, Samir Gadio, an emerging markets strategist at Standard Bank Group Ltd. in London, said in an e-mail today.

Inflation accelerated after food prices increased 9.5 percent in September from 8.7 percent in the previous month, the statistics office said. Food accounts for about half of the consumer price index.

The naira fell to a record low 164.15 per dollar on the interbank market this month. The bank aims to keep the currency within 3 percent of 150 against the dollar and inflation below 10 percent.

--With assistance from Simbarashe Gumbo in Johannesburg. Editors: Dulue Mbachu, Nasreen Seria

To contact the reporters on this story: Maram Mazen in Khartoum at mmazen@bloomberg.net; Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


Coke's Big Fat Problem
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus