Boko Haram, drought fuel inflation
From OKORO CHINEDU in Lagos, Nigeria
LAGOS, (CAJ News) – A leading financial house has cited the Boko Haram insurgency among setbacks that will result in an increase in food inflation and a reduction in market stocks.
Rand Merchant Bank (RMB) gave the projection on Monday when it was reported the country’s headline inflation held steady in January from December at 9,6 percent year-on-year.
In its Global markets report, the bank said although food inflation maintained its 10,6 percent level seen in the previous month, it remained its primary concern given its overwhelming weighting in the composite index.
“The late onset of the rainy season and intermittent dry spells across many areas of the country, delayed yield growth in 2015. Acute flooding in certain regions, limited cropping in the conflict-riddled northeast and partial access to inputs could lead to below-average harvests in many areas in 2016, eroding market stocks,” the RMB stated.
It said however, a resumption of orderly gasoline supplies should arrest the ascent in food inflation over the near term.
The bank’s inflation profile suggests an average inflation rate of 9,97 percent in 2016 and 10,96 percent in 2017.
“While the 12-month change in core inflation remains sticky, it is at risk of becoming unhinged owing to second-round effects, necessitating tighter monetary policy.”
– CAJ News
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