AHEAD of the official release of the December 2024 headline inflation rate by the National Bureau of Statistics (NBS), CAPE Economic Research & Consulting has projected December 2024 headline inflation rate to hit 35.3 percent.
CAPE Economic Research & Consulting stated that the principal drivers shaping the forecast for headline inflation persist in food prices, the exchange rate, housing, and utility costs, contributing 4.70 percent, 0.38 percent, and 0.31 percent, respectively.
In its latest Economic Newsletter, volume 4, Issue 1, January 2025, CAPE stated, “Inflation is expected to heighten in December 2024.
Our forecast showed that inflationary pressure would heighten as headline, food and core inflation are expected to rise to 35.3, 42.6 and 29.3 percent respectively.”
CAPE analysis highlights the critical role of rising food prices, exchange rate volatility, and escalating housing and utility costs in driving headline inflation.
It noted that the deregulation of energy prices and subsequent adjustments in exchange rates have continued to amplify inflationary pressures, effects that are projected to linger into the medium term.
According to CAPE, core inflation is predominantly influenced by upward trends in transportation, education, clothing, housing, utilities, and healthcare expenses.
These inflationary dynamics, it noted, are further exacerbated by the growing fiscal deficit, the withdrawal of fuel subsidies, and sustained exchange rate pressures, which collectively create substantial pass-through effects on consumer prices.
The National Bureau of Statistics (NBS) reported last month that Nigeria’s headline inflation rate accelerated to 34.60 percent in November 2024, up from 33.88 percent in October 2024.
This uptick, the NBS noted, reflects persistent upward pressures on the cost of goods and services, exacerbated by high energy prices, currency depreciation, supply chain disruptions, infrastructural deficits, insecurity and heightened demand dynamics typically associated with the year end.
However, CAPE highlighted that: “There are strong indications that Nigeria’s real GDP performance in the final quarter of 2024 would remain positive, building on the growth momentum recorded in Q3 2024, driven by a seasonal surge in economic activities associated with year-end festivities,” as Nigeria’s headline Purchasing Managers’ Index (PMI) data for Q4 2024 reveals a gradual recovery, with the private sector overcoming prior contractions and demonstrating resilience amid persistent challenges such as inflationary pressures, infrastructural deficits and lingering currency weakness, which continued to weigh on business operations.
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