Nigeria inflation sustains rise for 10th consecutive months to 12.5%

Nigeria’s inflation rose for a 10th straight month in June amidst a coronavirus pandemic that has ravaged the global economy.

The Consumer Price Index (CPI) which measures inflation rose to 12.56 per cent in June, lifted by food and healthcare costs, its highest level in more than two years, from 12.4per cent in May, a new report by the National Bureau of Statistics has revealed.

According to the report, which was released on Friday in Abuja, the June inflation rate is 0.16 percentage points higher than the rate recorded in May 2020 (12.40%).

The CPI measures the average change over time in prices of goods and services consumed by people for day-to-day living.

This is the highest point reached since March 2018 when inflation was at 13.34 per cent.

“The urban inflation rate increased by 13.18 per cent (year-on-year) in June 2020 from 13.03 per cent recorded in May 2020, while the rural inflation rate increased by 11.99 per cent in June 2020 from 11.83 per cent in May 2020,” the report read.

The corresponding twelve-month year-on-year average percentage change for the urban index was 12.50 per cent in June 2020. This is higher than 12.36 per cent reported in May 2020, while the corresponding rural inflation rate in June 2020 was 11.36 per cent compared to 11.26 per cent recorded in May 2020.

The composite food index rose by 15.18 per cent in June 2020 compared to 15.04 per cent in May 2020. This rise in the food index was caused by increases in prices of Bread and Cereals, Potatoes, Yam and other tubers, Fruits, Oils and Fats, Meat, Fish and Vegetables.

“On a month-on-month basis, the food sub-index increased by 1.48 per cent in June 2020, up by 0.06 per cent points from 1.42 per cent recorded in May 2020.

The average annual rate of change of the Food sub-index for the twelve-month period ending June 2020 over the previous 12 months average was 14.46 per cent, representing a 0.13 per cent points increase from the average annual rate of change recorded in May 2020 (14.33 per cent).

The ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 10.13 per cent in June 2020, up by 0.01percent when compared with 10.12 per cent recorded in May 2020.

On a month-on-month basis, the core sub-index increased by 0.86 per cent in June 2020.

“This was down by 0.02 per cent when compared with 0.88 per cent recorded in May 2020. The highest increases were recorded in prices of Medical services, Hospital services, Passenger transport by road, Pharmaceutical products, Motor cars, Paramedical Services, Maintenance and repair of personal transport equipment, Bicycles, Motorcycles, Vehicle spare parts and Other services in respect of personal transport equipment. The average 12-month annual rate of change of the index was 9.37 per cent for the twelve-month period ending June 2020; this is 0.1 per cent points higher than 9.27 per cent recorded in May 2020.

The central bank is due to meet on Monday to set interest rates after it last week depreciated the Naira by 5.5per cent against the dollar on the official market, its second adjustment in six months.

Rising inflation has caused yields on Treasury bills and bonds to turn negative, a major stumbling block for the central bank’s push to attract foreign inflows to support the Naira and boost the economy. The statistics office said prices of medical services, pharmaceutical products, transport and associated services rose the most on the non-food index.

A separate index for food, which accounts for the bulk of the inflation basket showed a price increase of 15.18 per cent from 15.04per cent in May, while food inflation has been in double digits for more than three years.