Inflation Drops to 8.4% amid Higher Food Prices

Food products on display in the market

Nigeria's Consumer Price Index (CPI), which measures the level of inflation in the country dropped to 8.4 percent in June, compared to the 9 per cent it attained in May, figures from the National Bureau of Statistics (NBS) showed  Tuesday.

NBS explained core and food indices in June averaged 8.9 percent and eight percent respectively, compared to the 12.5per cent and 14.1 per cent recorded respectively in the previous months.

The NBS attributed the drop in inflation in inflation rate to "slower rises in all Classification of Individual Consumption According to Purpose (COICOP) classes, except the food and non-alcoholic beverages class."

Although this resulted into the muted rise in the core sub index, food prices, however, increased at a faster rate compared to May, as the country went deep into the planting season.

"Food supplies continue to be tight as inventories decline, creating upward pressure on prices," it added.
On a month-on-month basis, the headline index increased by 0.59 per cent in June, from 0.67 percent in May.

Year-on-year, urban inflation fell to 8.4 percent in the period under review, compared to the 9.4 percent recorded in May.

The NBS report further stated that the composite food index increased year-on-year to 9.6 percent from 9.3 percent in May while on month-month basis, the food sub-index increased by 0.7 percent between May and June.

"Food prices continued to gain upward momentum as the country is deep into the planting season. Markets are facing tight supplies of farm produce as inventory levels continue to dwindle creating upward pressure on prices," it stated.

It also showed that the ‘All Items less Farm produce,’ or core index which excludes the prices of volatile agricultural products also increased by 5.5 per cent year-on-year.

According to the report, the core inflation continued to exhibit muted year-on- year changes, largely due to base effects as the core sub-index also showed relative moderation increasing 0.3 percent in June from 0.5 percent in May.
"Significant price increases were observed in the actual and imputed rental prices, clothing materials and accessories, liquid and solid fuel classes," it noted.


Source: Thisdaylive