Dear All,
The National Bureau of Statistics (NBS) reported an increase in Consumer Price Index for December 2022 by 21.34% YoY (vs. 21.47% YoY in November 2022). This marks the first instance of disinflation in the last 11 months, which was driven by the slower pace of increase in the food index. Food inflation rose to 23.75% YoY (vs. 24.13% YoY in November 2022) mainly driven by prices of food items such as bread, cereals, potatoes, fish, oil and fat, yam and other tubers. Conversely, the core sub-component of the index rose by 18.49% YoY (vs. 18.24% YoY in November 2022) on the back of increased cost of gas, liquid and solid fuel, vehicle spare parts, fuels and lubricants, and transportation by air. On a month-on-month basis, food inflation gained momentum, up by 1.89% MoM (vs. 1.40% MoM in November 2022), while core inflation slowed to 1.33% MoM (vs. 1.67% MoM in November 2022). In line with our expectation, we project that the Monetary Policy Committee (MPC) will sustain its hawkish stance at its upcoming meeting, albeit at a slower pace.
