Nigeria Inflation Stays Below 10% in Longest Streak Since 2008

Nigeria’s inflation slowed to 9 percent in May, meeting the central bank’s single-digit target for the fifth month, the longest streak in five years.

The inflation rate of Africa’s top oil producer fell from 9.1 percent in April, the National Bureau of Statistics said yesterday in a report on its website. The median estimate of seven economists surveyed by Bloomberg was 9 percent. Prices rose 0.7 percent in the month.

Core inflation, which excludes farm produce, eased to 6.2 percent in May from a year earlier, compared with 6.9 percent in April, the Abuja-based statistics bureau said. It will probably be “muted” for the rest of the year as the impact of last year’s higher fuel prices waned, the agency said.

Nigeria’s Monetary Policy Committee has held the benchmark interest rate at a record 12 percent since October 2011 to curb inflation and support the country’s currency against the dollar. The naira has weakened 2.5 percent this year against the dollar, with foreign reserves at $48.5 billion as of June 13, according to the central bank.

“The trend in headline inflation, whilst comfortable, is likely to prove temporary as we expect the base effect to wane over the next quarter,” Adedayo Idowu, analyst at Lagos-based Vetiva Capital Management Ltd., said today in an e-mailed note to clients. It will “eventually revert to double digit by” the third-quarter, she said.

Growth in consumer prices will remain under 10 percent for the rest of the year if the rate maintains a single digit by October, Central Bank of Nigeria Governor Lamido Sanusi said on May 27. The Abuja-based bank may raise its policy rate if government spending increases before the elections in 2015, Sanusi said on June 3.

Food prices, which account for more than half of the consumer price index, fell to 9.3 percent in May from a year earlier, compared with 10 percent in April, according to the report.

The inflation rate slid below 10 percent in January, meeting the central bank’s target for the first time since August 2011.

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