Nigeria’s annual inflation dipped for the third straight month in June to 17.75 per cent as food prices dropped.
According to the Nigerian Bureau of Statistics on Friday, inflation, which has been in double-digits since 2016, stood at 17.93 per cent in May.
Analysts had expected inflation to pick up after it dipped in May due to the impact of a devaluation in that month on imported goods and higher diesel costs on local production.
In May, the central bank devalued the naira by 7.7 per cent on the official market and later said the currency was overvalued by up to 10 per cent on the spot market based on its model. The naira has since weakened on the black market.
The government has said inflation is a structural problem linked to infrastructural deficits and not solely a money supply issue, citing that most of it was also imported.
“Prices continued to rise in June 2021 but at a slightly slower rise than they did in May 2021,” the NBS said in a report.
The National Bureau of Statistics said on Friday core inflation – the price index less farm produce – dipped in June to 13.09 per cent
Food prices, the major component of inflation, fell 45 basis points from the previous month to 21.83 per cent in June, NBS said.
The central bank is due to meet in two weeks to set benchmark interest rates but with weak growth, few expect any alteration. The central bank has been dovish since September by leaving rates on hold at 11.5 per cent.
But inflation, which is currently above the central bank’s 6-9 percent target band, has pressured households, coupled with a shrinking labour market and mounting insecurity.
Nigeria’s economy grew 0.5 per cent in the first quarter, after overcoming a recession the previous quarter.