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Nigeria’s inflation jumps to 27-month high on food prices

17 Jul 2020, 10:22 am
Financial Nigeria
Nigeria’s inflation jumps to 27-month high on food prices

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The new data also shows the inflation rate has risen by 154 pbs since August 2019.

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The National Bureau of Statistics (NBS) reported today that Nigeria’s Consumer Price Index (CPI) rose to 12.56 per cent year-on-year in June, the highest inflation rate recorded since March 2018 when the CPI stood at 13.34 per cent.

According to the NBS’ latest monthly inflation report, the rise in the inflation rate in June represents an increase of 16 basis points (bps) (or 0.16 percentage point) compared to 12.40 per cent reported in May 2020. The new data also shows the inflation rate has risen by 154 pbs since August 2019.

On month-on-month basis, the headline inflation increased by 1.21 per cent in June, or 0.04 percentage point higher than the rate recorded in the previous month. The NBS said there were increases in all major indices. All the Classification of Individual Consumption by Purpose (COICOP) divisions that yielded the latest headline index recorded increases.

According to the statistics agency, food inflation rose by 14 bps to 15.18 per cent last month compared to 15.04 per cent reported in May 2020. The food index, which accounts for more than half the inflation basket, also rose the most since March 2018.

The NBS said the rise in the food inflation was caused by increases in prices of bread and cereals; potatoes, yam and other tubers; oils and fats; fruits; fish, meat and vegetables. Based on state profiles, food inflation was highest in Sokoto (17.88 per cent), Plateau (17.04 per cent) and Abuja (16.82 per cent), while Lagos (13.46 per cent), Ogun (13.18 per cent) and Bauchi (12.86 per cent) recorded the slowest rise.

Core inflation, which excludes the prices of volatile agricultural produce, stood at 10.13 per cent in June, rising by 0.01 percentage point when compared to the preceding review period. The statistics agency said the highest increases were recorded in prices of medical services, hospital services, passenger transport by road, pharmaceutical products, motor cars, and paramedical services.

Price increases were also recorded in maintenance and repair of personal transport equipment, bicycles, motorcycles, vehicle spare parts and other services in respect of personal transport equipment.

Also, in the review period, urban inflation rate stood at 13.18 per cent, rising by 15 bps from 13.03 per cent recorded in May, while the rural inflation rate rose by 16 bps from 11.83 per cent reported in May to 11.99 per cent last month.

Nigeria's inflation rate has been above the Central Bank of Nigeria's (CBN) target band of 6-9 per cent for over five years. According to Bloomberg, the inflation figure for June matched the median of the estimates by four economists it surveyed.

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