The Consumer Price Index, CPI, measures the average change over time in prices of goods and services consumed by people for day-to-day living. The latest rate confirms most analysts’ projections that efforts by authorities to mitigate the surging prices in the economy were not sustainable, given the country’s prevailing fiscal indices in recent months.
The CPI Report published by National Bureau of Statistics, NBS, yesterday attributed the significant upswing in the rate, which represented about roughly 0.9 per cent points higher from rates recorded in the preceding month of 12.8 per cent, to faster pace of increases recorded across almost all major divisions which contribute to the Headline index, with the exception of the restaurants and hotels division. The Bureau noted that lingering structural constraints continued to manifest spillovers in the month under review as electricity rates, kerosene prices, the impact of higher PMS prices and vehicle spare parts contributed largest to the Core Sub index during the month.
According to the official statistics producing agency, these items as well as other imported items continued to have ripple effects across many divisions that contribute to the Core index, resulting in its increase by 13.4 per cent during the month, representing about 1.2 per cent points from rates recorded in March.
The Bureau noted that food index reflected tighter supplies across most groups that contribute to the sub-index which increased by 13.2 per cent year-on-year in April, up by 0.4 per cent points from rates recorded in the previous month as all major food groups which contribute to the sub-index increased at a faster pace driven by higher food prices in fish, bread and cereals, and vegetables groups. When analysed on month-on-month basis, NBS noted that while the Headline Index increased in April, the food index slowed for the second consecutive month, increasing by1.6 per cent or 0.6 per cent points higher from rates recorded in the preceding month. This is even as the agency reported also that year-on-year, both the urban and rural indices recorded marked increases for the third consecutive month in April.
While the urban index rose by 15.1 per cent, representing 1.6 per cent higher than the 13.5 per cent recorded in March, upward pressure on prices were relatively less severe in the rural areas as the index increased 12.8 per cent year-on-year, indicating 0.7 per cent points up from the 12.0 per cent in March. “On a month-on-month basis, while the urban index increased at a faster pace, from 2.0 per cent in March to 2.2 per cent in April, the rural index increased at a slower pace, from 2.1 per cent in March to 1.4 per cent in April. “The percentage change in the average composite CPI for the twelve month period ending in April 2016 over the average of the CPI for the previous twelve-month period was 10.2 per cent, higher from 9.8 per cent recorded in February. “The corresponding twelve months year-on-year average percentage change for the urban index increased from 9.9 per cent in March to 10.5 per cent in March, while the corresponding rural index also increased from 9.6 per cent in March to 9.9 per cent in April,” NBS stated. On the
“All Items less Farm Produce” or Core sub-index, NBS also reported that the index increased by 13.4 per cent in the month up from the 12.2 per cent recorded in March following increases at a faster pace of the key divisions, which contribute to the index, with the exception of the restaurants and hotels division. It would be noted that speculation that the Central Bank of Nigeria, CBN, will soon devalue the currency had been rife in recent weeks until the apex bank denied the rumour at the weekend.
Reacting to the latest inflation trend amid lingering speculation about the monetary policy changes, Chief Economist, Africa at Standard Chartered Bank, Razia Khan, said that “the focus inevitably shifts to what sort of monetary policy reaction to anticipate ahead to the Monetary Policy Committee meeting scheduled for next Monday and Tuesday. “With the central bank governor previously stating that a headline inflation rate in excess of the MPR (benchmark interest rate) is undesirable, expectations of tightening are likely to build.”