Headline inflation in Nigeria continued to escalate in July, coming in at 19.6 percent y/y from 18.6 percent y/y in June, and surpassed consensus expectations of a rise to 19.4 percent. The July reading marks the fastest pace of price growth in the economy since September 2005 and was driven by price increases for food, fuel, and clothing. A slump in the Nigerian naira also contributed to the higher inflation print in July. Overall inflation accelerated for the sixth straight month in July and is now more than double the 9 percent ceiling of the CBNโs target band. Risks are tilted to the upside due to persisting security issues in the countryโs food production regions, high fuel costs, currency weakness, and as policymakers could vote to increase the main policy rate for a third straight meeting in September.
