Financial analysts predicted a decrease in February inflation rate, from 9.5 per cent to 8.7 per cent, representing a 0.8 per cent drop.
A report by the Financial Derivative Company Limited on Friday, said, “Based on our analysis, we are forecasting that the national headline inflation for March will decline to 8.7 per cent when the data is released, supporting our expectation of a moderating inflation environment in 2013.”
The report added that now that the headline inflation was likely to fall below nine per cent, the interest rate debate would now likely become a burning issue amongst investors, fixed income traders and portfolio managers in the next few weeks.
It said, “The next Monetary Policy Committee meeting will be preceded by April’s headline inflation which will determine if the declining inflation environment is sustainable. The inflation data for April may not be released before the MPC meeting; therefore the March data may be the lighting rod that will tilt the MPC’s thinking. However, if the April inflation data is released, it will only go to validate or negate the thinking of members.”
The National Bureau of Statistics put the country’s inflation rate for the month of February at 11.9 per cent.
The February inflation figure, according to the bureau, represents a 0.7 percentage decrease when compared to the 12.6 per cent recorded in January.
In its monthly Consumer Price Index Report, the NBS said, “The Composite Consumer Price Index, which measures inflation, rose to 11.9 per cent year-on-year in February 2012. This figure is 0.7 percentage points lower than the 12.6 per cent recorded in the previous month.
“The monthly composite CPI was higher by 0.3 per cent when compared with January 2012. The increase in the headline index, composed of the core and food indices, was due to the partial petrol subsidy removal that pushed up prices of many food and non-food items, including transport fares (not transportation in general).”
According to the report, seasonal adjustments occurred during the period, as prices in the urban areas declined in February after higher spending in December, which usually pushes prices higher during that period.
NBS said the biggest contributors to the consumer inflation were the high prices of most food items, liquid and solid fuels, furniture and transport fares.
“The rise in the food inflation was mainly due to the increasing cost of cereals, yam, other tubers, cooking oil, meat, fruit, vegetables and beverages,” it added.