Renowned financial analyst, Bismarck Rewane, Chief Executive Officer (CEO) of Financial Derivatives Company (FDC) Limited has warned inflation could cross the 12 per cent mark January, 2020 as a result of increase in diesel price and the rise in liquidity.

Ourmarket survey in January reveals that headline inflation is likely to inch upto 12.05 per cent from 11.98 per cent in December 2019. If this forecast isaccurate, it will mean that inflation has increased for five consecutivemonths. This will be a major concern for the policy makers, a publicationof FDC yesterday said.

The MonetaryPolicy Committee (MPC), at its last meeting, emphasized the determination ofthe CBN to rein in inflation because of its negative impact on Gross DomesticProduct (GDP) growth and unemployment.

The surveyalso expect food and core inflation to move in tandem with the headlineinflation, rising to rise to 14.7 per cent and 9.4 per cent respectively.

The goodnews though is that the incremental change in the price level is now down to amere 0.07 per cent from 0.36 per cent in October 2019. This is primarilybecause the base year effects of the border closure is losing steam andconsumers purchasing power is squeezed.

The reportsaid, impact of the Central Bank of Nigeria (CBN)s unorthodox policieshas been a sharp decline in interest income, which has resulted in a reductionin aggregate consumption. The minimum wage impact has also been benign as Federalworkers account for an insignificant proportion of the national workforce andsome of the states are yet to commence payment. However, money supply growthand higher logistics cost continue to stoke inflationary pressures.

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