2018-07-02 12:44:38

Annual inflation in Nigeria slowed to 11.61% in May, its lowest level in more than two years and its 16th straight monthly drop, the National Bureau of Statistics stated.

It fell from 12.48% in April. A separate food price index showed inflation at 13.45% in May, compared with 14.80% in April.

Nigeria’s worst economic crisis in decades has been driven by a sharp drop in oil prices that has slashed government revenues since the country relies on crude sales for around 70% of national income.

Gross domestic product growth was just 2.8% last year, its lowest rate since 1999, and speculation of a devaluation of the naira currency is growing. March inflation was 12.8%.

Food inflation has been in double digits for almost three years but has slowed for more than six months.

The statistics office said the highest increases were recorded in potatoes, yam and other tubers, as well as vegetables, fish, bread and cereals.

The Central Bank Governor held interest rates at 14% 3 months ago, saying that inflation was still above its single-digit target. The bank said inflation could worsen again with the influx of cash from spending related to Nigeria’s much-delayed 2018 budget.

Nigeria emerged from its first recession in 25 years in 2017, helped by higher oil prices, but growth remains fragile.

It passed a record 9.12 trillion naira budget last month meant to boost growth, but excessive spending could stoke inflation especially in the run-up to February 2019 presidential election.

The Central Bank has kept benchmark rates tight for more than a year to curb inflation, support the naira and attract foreign investors into its debt market.

Inflation has also been fuelled by pressure on the naira, which recently slipped to its weakest level in months against the dollar in the non-deliverable forward market.