ACCESS BANK I INFLATION FORECAST I AUGUST 2020

INFLATION
FORECAST

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The Economic Intelligence Group
Access Bank Plc
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Oniru Estate Lekki,
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E: economicIntelligence@accessbankplc.com
Disclaimer: This report is our opinion on the Nigerian macroeconomic landscape and investment environment. Reliance upon information in this report is at the sole discretion of the recipient/reader.
Access Bank PLC does not warranty its completeness, timeliness or accuracy. Past performance is not a guarantee of future results. Any forecast contained herein is for illustrative purposes only and
is not to be relied upon as advice or interpreted as a recommendation. Always consult your financial advisor before making investment decisions.
 ACCESS BANK I INFLATION FORECAST I AUGUST 2020

Inflation Forecast
FOR AUGUST 2020

The National Bureau of Statistics (NBS) is scheduled to application of an autoregressive econometric model using
release the inflation figure for August 2020 on September lags of the composite consumer price index (CPI) and a
15, 2020, based on the data release calendar available on survey-based inflation expectation within the same
the Bureau's website. product definitions adopted by the NBS.

Access Bank's Economic Intelligence Unit forecasts
headline inflation for August 2020 to rise to 13.09% from
12.81% recorded in July 2020. The soaring trend reflects
the impact of COVID-19 on the economy especially the
value chain disruptions. Our methodology entails the
Transportation and food prices rose reflecting the month-
on-month due to frictions in movement across several
states in the country. Therefore, we expect the CPI to
settle at 334.2 points from 330.1 in the preceding month.

INFLATION FORECAST FOR AUGUST 2020

13.09
13.00 12.81
12.56
12.50
12.20 12.26 12.35 12.45
12.13
12.00 11.84 11.97
11.60
11.50
11.25
11.01
11.00

10.50

10.00
April
March

May

August
June
August

October

January
November

December

February

July
September

2019 2020

Inflation Forecast Drivers

Rise in transportation cost, scarcity in production The Naira depreciated at the parallel market moving
materials, food shortages due to insecurity stemming from N474/US$ at the start of the month to N478/US$ by
from some food-producing states as well as the weaker month-end.
currency.
Petrol pump price finished at N145 per litre.
Prices of food and non-alcoholic beverages, the largest
component in the consumption basket (with a weight of
51.8%) majorly sustained the uptick trend. Consequently,
items and increment rate in August include local rice
(3.78%), pepper (73.33%), turkey (15.14%), onions
(18.33%), beans (24.7%) and garri (5.61%)

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 ACCESS BANK I INFLATION FORECAST I AUGUST 2020

Probable Market Impact Points

Money and Fixed Income Market:
We expect a continued low yield environment in the
government T-Bills market. Yields on the 3-month & 9-
month treasury bills fell to 1.12% and 2.27% on August
31st from 1.27% and 2.57% respectively in the prior
period.
the short to mid-term. Nonetheless, we note that the CBN
is likely to sustain policies that are directed at enhancing
financial inclusion, SME financing and infrastructure
development initiatives.

Monetary Policy Responses:

The CBN will likely continue to retain the Monetary Policy
Rate (MPR) at 12.5%. At this rate, it still ensures a healthy
real return and a competitive rate environment that The Economic Intelligence Unit
stimulates the much-desired foreign portfolio inflows in Access Bank Plc

Disclaimer Clause
This report was based on information obtained from various sources believed to be reliable. Reasonable care has been taken in preparing this document. Access
Bank Plc shall not take responsibility or liability for any errors or fact or for any opinions expressed herein. This document is for information purposes and for private
circulation only, and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc. All our
research is free and you can view our latest reports in the Economic Research section on the Bank's website. For enquiries, please contact: Rotimi Peters, Head,
Economic Intelligence - Access Bank Plc, Access Bank Towers, Prince Alaba Oniru, Oniru, Victoria Island, Lagos, Nigeria.

Email: economicintelligence@accessbankplc.com

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