Bloomberg News

Nigerian Inflation Accelerates to 12.9%, Agency Says

July 18, 2012

Nigeria’s inflation rate rose to 12.9 percent in June, adding to pressure on the central bank to keep interests rates unchanged at a record high next week.

Inflation in Africa’s top oil producer accelerated from 12.7 percent in May, the Abuja-based National Bureau of Statistics said today in an e-mailed report. Prices rose 1.2 percent in the month.

The Central Bank of Nigeria, led by Governor Lamido Sanusi, has kept its policy rate unchanged at 12 percent this year, after raising it by 5.75 percentage points in 2011, to curb price pressures. The Monetary Policy Committee has forecast inflation will peak at 14.5 percent in the third quarter, boosted by fuel costs after the government partially removed subsidies.

“Governor Sanusi and his committee will remain quite comfortable holding rates steady for now,” Andrea Masia, an economist at Morgan Stanley in Johannesburg, said in a note to clients before today’s data. “Further tightening does not appear high on the agenda either.”

The central bank expects inflation to ease below 10 percent, its target, by the end of 2013.

Gasoline prices were increased to 97 naira ($0.61) a liter (0.26 gallon) from 65 naira in January. The government in June raised electricity prices by at least 40 percent for most middle-income consumers.

Inflation accelerated last month because of higher food and energy costs, the statistics office said. Food prices rose 0.5 percent in June from the previous month, compared with a 1.2 percent increase in May. The core inflation rate, which excludes food, rose to 15.2 percent from 14.9 percent, it said.

Nigeria’s economic growth is forecast to slow to 6.5 percent this year from 7.4 percent in 2011 as the global recovery loses momentum, the statistics agency said on May 9.

To contact the reporter on this story: Maram Mazen in Abuja at mmazen@bloomberg.net

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


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