FRI, SEPT 15 2023-theGBJournal |Nigeria’s annual inflation rate rose sharply by 172bps to 25.80% in August, from 24.08% in July 2023, as the rise in energy and food prices over the past six months led to the sharp increase in cost of living.
The outturn is 10bps and 80bps higher than Cordros’ estimate (25.70% y/y) and Bloomberg’s median consensus estimate (25.00% y/y).
Similarly, on a month-on-month basis, headline inflation rose by 29bps to 3.18% (July: 2.89% m/m).
The figures announced today by the National Bureau of Statistics (NBS) did not surprise the country’s financial markets as most analysts agree inflation rate will stay on the upward trajectory for the rest of the year.
The sharp rise in CPI means that prices are increasing at a faster pace than increases in wages, and which in turn adds pressure on the Central Bank of Nigeria (CBN) to stay the course on rates hike.
Meanwhile, food inflation maintained its uptrend in August, rising by 236bps to 29.34% y/y (July: 26.98% y/y).
The rise in food inflation on a year-on-year basis was influenced 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, food inflation increased by 3.87%, relative to the 3.45% m/m recorded in the previous month.
Likewise, the core inflation (All items less farm produce and energy) rose by 68bps to 21.15% y/y (July: 20.47% y/y).
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.
On a monthly basis, the core index settled higher by 7bps to 2.18% m/m in August (July: 2.11% m/m).
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