The National Bureau of Statistics (NBS) reported headline inflation for August at 20.52% YoY (vs. 19.64% in July)— 44bps above our forecast of 20.08% YoY. This marks the highest inflation rate recorded in 17 years and was driven by an uptick in both the food and core indices. Food inflation increased to 23.12%YoY (vs 22.02% in July 2022) driven by the increase in prices of bread, cereals, potatoes, yam, fish, oil, meat, yam, and other tubers. Similarly, core inflation ticked up to 17.20% YoY (vs 16.26% in July 2022), with its major drivers been higher prices of gas, solid and liquid fuels, transportation cost and clothing materials. We observed a slower Month-on-Month growth rate for both indices: Food index increased by 1.77% MoM compared to 1.82% MoM in July and Core index expanded by 1.59% MoM (vs 1.75% in July 2022).
