By Peter Egwuatu

LAGOS—Financial experts have predicted that May inflation might likely hit over 14 per cent as the National Bureau of Statistics, NBS, prepares to release inflation figure for May 2016 this week. The Economic Intelligence Group of Access Bank Plc in a report weekend projected that the headline inflation for May increased to 14.7 per cent from the 13.7 per cent level in April even as the Financial Derivatives Company Limited, FDC, also estimated a spike in year-on-year inflation to 14.5 per cent for May.

Access Bank’s Economic Intelligence unit based the methodology they adopted in arriving at the projection on an autoregressive analysis of past prices, while recognising all the assumptions used by the NBS in its computation of monthly composite consumer price index, CCPI.

The Intelligence Group  expects upward momentum in headline inflation in May reflected increases in both food and core components of inflation, adding that with a 51.8 per cent weighting in the inflation basket, the food component has been responsible for a sizeable amount of overall price pressure.

It was specific that increases in the prices of cereals, fruit, meat, fish, dairy, tubers, tomatoes, and vegetables were expected to be the main culprits behind the anticipated CPI acceleration.

According to the report; “The review of petrol pump price is likely to have mounted further pressure on May inflation numbers, driven by the transport component and the electricity, gas and other fuels components, which together contribute 23.2 per cent to the CPI weighting.

“Continued weakness in the naira, following the announcement of the deregulation of the downstream petroleum sector has also placed significant pressure on the inflation rate.

“This will have filtered into consumer prices as some firms may have sourced scarce foreign exchange from the parallel (black) market to import intermediate goods to maintain operations.”