- December year-on-year CPI accelerated by 9.6 percent
- Rate above central bank's target range of 6-9 percent
Nigeria’s inflation rate accelerated to a three-year high in December as food prices rose in Africa’s biggest economy and oil producer.
The consumer price index increased by 9.6 percent on an annualized basis, compared with 9.4 percent in November, the Abuja-based National Bureau of Statistics said in a report published on Sunday. Food price inflation climbed to 10.6 percent from 10.3 percent.
Inflation is now at its highest since December 2012 and has been above the central bank’s target of 6-9 percent every month since May 2015.
Nigeria’s economy, which relies on oil for two-thirds of government revenue, has been battered by crude prices falling 42 percent in the last year to below $30 a barrel. Efforts by the central bank to stem the fall of the naira by stopping banks from trading dollars are blamed by some analysts for accelerating inflation by preventing businesses from importing all the items they need to operate.
“Imported food along with other exchange-rate-sensitive price categories recorded higher sequential rates of inflation during December, likely as a result of tighter foreign exchange supply,” Chernay Johnson, an analyst at Credit Suisse Group AG in Johannesburg, said in an emailed note to clients on Monday.
Inflation will be driven higher in the coming months by increased energy prices and government spending as President Muhammadu Buhari implements a record budget meant to stimulate the economy, she said.
“The upside risk to our end-2016 CPI inflation forecast of 10.2 percent is growing,” Johnson said. All 12 analysts surveyed by Bloomberg think the central bank will keep its main interest rate at 11 percent at its next meeting on Jan. 25-26.