Fiscal Laxity Worsens Inflation Outlook

BMI View: While a jump in headline inflation to 8.6% y-o-y in January 2008 from 6.6% y-o-y in December 2007 is worrying, we are more concerned about the major fiscal expansion scheduled for 2008. We believe the Central Bank of Nigeria will work to keep inflation below 10%, and have revised our forecast up to an average 9.8% over 2008.

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