Nigeria’s Inflation Rate Declines to 5-Year Low in June

Nigerian inflation slowed for a second month to 8.4 percent in June, the lowest since April 2008, the National Bureau of Statistics said.

The inflation rate of Africa’s largest oil producer declined from 9 percent in May, the Abuja-based statistics office said yesterday in an e-mailed report. The median estimate of 12 economists surveyed by Bloomberg News was 8.8 percent. Prices climbed 0.6 percent in the month.

The inflation rate fell below 10 percent in January, meeting the Central Bank of Nigeria’s target for the first time since August 2011, as the impact of last year’s higher fuel prices waned. The central bank kept its policy rate at a record 12 percent for the 10th consecutive meeting in May on concern spending was poised to rise after the military began an offensive against Islamist militants in the northeast.

“We believe that June’s inflation print may be close to a trough and expect it to edge higher to 8.7 percent by year-end,” Ridle Markus and Dumisani Ngwenya, Africa strategists at Absa Capital in Johannesburg, wrote in an e-mailed note today. “Despite the still positive outlook for inflation, we do not believe that the Central Bank of Nigeria’s MPC will adjust monetary policy.”

The central bank may further raise its policy rate if government spending increases before elections in 2015, central bank Governor Lamido Sanusi said last month.

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