Nigeria’s Inflation Rate Rises To 12.40%, Highest In 2 yrs
OMOTAYO ARAOYE
Nigeria’s inflation rate has increased to 12.4O percent in May indicating a 0.06 percent point higher than 12.34 percent recorded in April, according to the latest inflation report released by the National Bureau of Statistics (NBS) on Wednesday.
The composite food Index (CPI) which measures inflation rose to 15.04 percent (year-on-year) compared to 15.03 percent recorded in the previous month while core inflation also rose to 10.12 percent in May 2020, up by 0.14 percent points compared two 9.98% recorded in April 2020, as the rise in the food index was caused by increases in prices of Bread and cereals, Potatoes, Yam and others.
As Nigeria continues to deal with the economic implication of the COVID-19 pandemic, the urban inflation rate rose by 13.03 percent (year-on-year) in May 2020 from 13.01 percent recorded in April 2020, while the rural inflation rate increased by 11.83 percent in May 2020 from 11.73 percent in April 2020.
On a month-on-month basis, the urban index rose by 1.18 percent in May 2020, up by 0.12 points from 1.06 percent recorded in April 2020, while the rural index also rose by 1.16 percent in May 2020, up by 0.18 points from the rate recorded in April 2020 (0.90 percent).
The corresponding twelve-month year-on-year average percentage change for the urban index is 12.36 percent in May 2020. This is higher than 12.26 percent reported in April 2020, while the corresponding rural inflation rate in May 2020 is 11.26 percent compared to 11.20 percent recorded in April 2020.
The percentage change in the average composite CPI for the twelve months period ending May 2020 over the average of the CPI for the previous twelve months period was 11.79 percent, showing 0.08 percent point from 11.71 percent recorded in April 2020.
The CPI measures the average change over time in the prices of goods and services consumed by people for day-to-day living. The construction of the CPI combines economic theory, sampling, and other statistical techniques using data from other surveys to produce a weighted measure of average price changes in the Nigerian economy.
The weighting occurs to capture the importance of the selected commodities in the entire index. The production of the CPI requires the skills of economists, statisticians, computer scientists, data collectors, and others.
Key in the construction of the price index is the selection of the market basket of goods and services. Every month, 10,534 informants spread across the country provide price data for the computation of the CPI. The market items currently comprise of 740 goods and services regularly priced.
Comments are closed.