Rewane: We must prepare, inflation will start increasing from August

Bismarck Rewane, economic analyst and chief executive officer of Financial Derivatives Company, says consumers must prepare for rising inflation from August 2018.

Speaking on a programme on Channels TV on Monday, Rewane said there are predictions that Nigeria will be a high inflation environment in 2019.

The National Bureau of Statistics released the June Inflation report on Monday, which showed that inflation rate slowed to 11.23% year-on-year in June but increased month-on-month to 1.24% from 1.09% in May.

“The consumers have to prepare themselves, we are going into a planting season, we are going into minimum wage negotiation, we are going into budgetary spending, we have to prepare ourselves for an increase in inflation after 17 months of consecutive decline, inflation is set to start increasing from next month. There is no question about that, that is the likely outcome,” he said.

“Month on month inflation is more current than year on year inflation. The price inflation you got today of 11.23 is actually comparing the prices of that basket of last year June to this year June.

“When you compare the price of that basket between May and June, you see that the actual rate of inflation has increased.

“When you annualise that, it comes to 15.94 which is significantly higher than 11.23 so that is the cause for worry that the inflation expectations and current inflation are pointing towards an increase.

“MPC will be concerned that if they do anything about interest rates now, they might actually just trigger inflation, the IMF warned sternly that any push or attempt to lower interest rates could trigger inflationary pressures and you don’t want that to happen eight months to an election.”