Inflation slows down to 15.37% amid pressure on food prices

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For the 11th consecutive month, the Consumer Price Index (CPI), which measures inflation, ended 2017 at 15.37 per cent (year-on-year) in the month of December.

This was 0.53 percentage points lower than the 15.90 per cent recorded in November – the 11th consecutive slowdown in the inflation rate since January 2017.
However, increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yield the headline index.

In the latest inflation figures released Tuesday, the National Bureau of Statistics (NBS) noted that on-a-month-on-month basis, the headline index increased by 0.59 per cent in December 2017, 0.19 percentage points higher than the 0.78 per cent recorded in November.

The percentage change in the average composite CPI for the 12-month period ending in December 2017 over the average of the CPI for the previous 12-month period was 16.50 per cent, indicating a 0.26 percentage point decrease from 16.76 per cent recorded in November.

Urban inflation rose by 15.78 per cent (year-on-year) in December, from 16.27 per cent recorded in November, while the rural inflation rate eased to 15.02 per cent in December from 15.59 per cent in November.

On a month-on-month basis, the urban index rose by 0.66 per cent in December, down by 0.19 from 0.85 per cent recorded in November, while the rural index declined to 0.54 per cent in December, down by 0.18 when compared with 0.72 per cent in November.

The corresponding 12-month year-on-year average percentage change for the urban index was 16.92 per cent in December.

This was less than 17.26 per cent reported in November 2017, while the corresponding rural inflation rate in December was 16.10 per cent, compared to 16.29 per cent recorded in November 2017.

The NBS noted that high year-on-year food prices and food price pressure continued into December though consistently at a slower pace month-on-month and at a slower pace year-on-year.

The food index increased by 19.42 per cent (year-on-year) in December, down from the rate recorded in November (20.30 per cent).

On a month-on-month basis, the food sub-index increased by 0.58 per cent in December, down by 0.30 per cent, from 0.88 per cent recorded in November.

The average annual rate of change of the food sub-index for the 12-month period ending in December 2017 over the previous 12-month average was 19.55 per cent, 0.16 per cent points from the average annual rate of change recorded in November (19.39) per cent.

The rise in the index was caused by increases in the prices of bread and cereals, potatoes, yam and other tubers, coffee tea and cocoa, milk, cheese and eggs, fish, oils and fats.

The “All Items less Farm Produce” or core sub-index, which excludes the prices of volatile agricultural products, stood during the month of December at 12.10 percentage points, down from 12.20 per cent recorded in November, as all key divisions which contribute to the index decreased.

On a month-on-month basis, the core sub-index increased by 0.51 per cent in December, lower than 0.78 per cent recorded in November.

The average 12-month annual rate of change of the index was 13.46 per cent for the 12-month period ending in December 2017. This represented 0.47 percentage point decrease over 13.93 per cent recorded in November.

The highest increases were recorded in the prices of fuel and lubricants for personal transport equipment, solid fuels, passenger transport by air, clothing materials and other articles of clothing, vehicle spare parts, non- durable goods, furniture and furnishing, carpet and other floor coverings.

Others were shoes and other footwear, bicycles and motorcycles, hospital services and glassware, table and household utensils and appliances.

On state-by-state basis, in December 2017, all items inflation on-a-year-on-year basis was highest in Bauchi (21.92 per cent), Nasarawa (18.16 per cent) and Kebbi (18.67 per cent), while Kogi (10.03 per cent), Delta (12.61 per cent) and Benue (13.35 per cent) recorded the slowest rise in headline year-on-year inflation.

On a month-on-month basis, however, all items inflation was highest in Edo (1.48 per cent), Yobe (1.34 per cent) and Kebbi (1.27 per cent), while Kogi (-0.96 per cent), Bauchi (-0.67 per cent), Nasarawa (-0.40 per cent), Kwara (-0.37 per cent), Ebonyi (-0.30 per cent) and Sokoto (-0.05 per cent) recorded a price deflation on a month-on-month all item basis in December 2017.

In the month under review, food inflation on a year-on-year basis was highest in Kwara (24.46%), Nasarawa (22.77%) and Yobe (22.60%), while Kogi, Bauchi and Benue recorded the slowest rise in food inflation.

On a month-on-month basis, however, food inflation was highest in Edo (1.90 per cent), Niger (1.76 per cent) and Akwa Ibom (1.76 per cent), while Kogi, Kwara, Ebonyi, Jigawa, Abia, Nasarawa, Sokoto, Gombe, Borno, Benue, Oyo, Kaduna, and Abuja all recorded food price deflation or negative inflation in December.

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