As the global economies continue to battle accelerating inflation, the Nigeria Headline Inflation prints 25.80% in August 2023, 1.72% rise compared with 24.04% in July.
According to the latest Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS), Nigeria’s inflation rate rose for Eight consecutive month, maintaining the highest rate in 18 years. Compared with the corresponding period of 2022, inflation rose 5.27% to 25.80% from 20.52% recorded in August 2022.
Food Inflation rose to 29.34% from 26.98%
The Food inflation rate in August 2023 was 29.34% on a year-on-year basis, which was 6.22% points higher compared to the rate recorded in August 2022 (23.12%). The rise in Food inflation on a year-on-year basis was caused by increases in prices of Oil and fat, Bread and cereals, Fish, Fruit, Meat, Vegetables and Potatoes, Yam and other Tubers, Vegetable, Milk, Cheese and Eggs.
On a month-on-month basis, the Food inflation rate in August 2023 was 3.87%, this was 0.41% points higher compared to the rate recorded in July 2023 (3.45%). The rise in Food inflation on a month-on-month basis was caused by increases in prices of Bread and cereals, Potatoes, Yam and other tubers, Fish, Oil and Fat, Coffee, Tea, and Cocoa. The average annual rate of Food inflation for the twelve months ending August 2023 over the previous twelve-month average was 25.01%, which was 5.99% points increase from the average annual rate of change recorded in August 2022 (19.02%).
The “All items less farm produces and energy” or Core inflation, which excludes the prices of volatile agricultural produces and energy stood at 21.15% in August 2023 on a year-on-year basis; up by 4.03% points when compared to the 17.12% recorded in August 2022. The highest increases were recorded in prices of Passenger Transport by Air, Passenger Transport by Road, Medical Services, Vehicle Spare parts, Maintenance, and repair of personal transport equipment etc. On a month-on-month basis, the Core Inflation rate was 2.18% in August 2023. It stood at 2.11% in July 2023, up by 0.07%. The average twelvemonth annual inflation rate was 19.18% for the twelve months ending August 2023; this was 4.38% points higher than the 14.80% recorded in August 2022.
Inflation Outlook for the Month of August’23
The CBN’s Monetary Policy Committee (MPC) would likely hike the Monetary Policy Rate (MPR) further by 25 basis points in the forthcoming September meeting to further contend accelerating inflation. Extension in voluntary crude oil cut by the Saudi Arabia, coupled with production shortage in some major OPEC member countries such as Nigeria and Libya; Russia’s Black-Sea-Deal backout, and global food shortages, remains the major factors influencing the uptick in Headline Inflation across the globe. Furthermore, rising food and logistics costs, caused by petrol subsidy removal, and Naira floating are other internal factors that has caused prices to skyrocket few months. With these factors put together, including rising global energy prices, and further depreciation of Naira, we expect Headline Inflation in the month of August to rise further around 26.3% in the month of September.