Expert predicts inflation stability in 2nd quarter

An economist, Dr Aminu Usman has predicted that inflation rate is likely to stabilise in the second quarter of 2018.

Usman, the Head of Economics Department, Kaduna State University, said this in an interview with newsmen on Monday in Abuja.

He was reacting to the February inflation report.

The Inflation rate, measured by the Consumer Price Index (CPI), dropped from 15.33 per cent in January to 14.33 per cent in February, according to the National Bureau of Statistics (NBS).

 “The current drop may be linked to stability in the external sector and the Foreign Exchange (FX) rate because inflation is fuelled by imports,” the don said.

Usman, however, said there may be slight increase in inflation by the end of the second quarter and into the third quarter.

He said the rise in inflation by the third quarter would be as a result of a likely rise in food prices due to onset of the rains.

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Meanwhile, the NBS said that the 14.33 per cent figure in February would be the 13 consecutive reductions in inflation since 2017.

This, according to the bureau, is driven by a decline in the pace of food price increases.

The food price index showed inflation at 17.59 per cent in February compared to 18.92 per cent in January.

However, the Statistician-General, Dr Yemi Kale said in January that he expected that inflation would fall faster this year compared to 2017, but that spending ahead of 2019 presidential elections could stoke prices.

Food price inflation has remained in high double digits over the last year.

Kale had said that the country was in a harvest period and output was increasing, which would help lower food prices, adding that household consumption remained fragile after the 2016 recession.