October Inflation Rate Jumps 5.09% To 21.9% Year on Year
Nigeria’s headline inflation accelerated to 21.09 percent in October 2022 compared with 15.99 percent recorded in October 2021, indicating that the general price level in the month of October 2022 increased by 5.09 per cent in the 12 months period between October 2021 and October 2022.
However, on a month-on-month (m/m) basis, the headline inflation rate declined 0.11 per cent lower from 1.36 per cent in the previous month of September to close at 1.24 per cent in October ’22 and which the National Bureau of Statistics (NBS) attributed the m/m decline to the current harvest season.
Food inflation recorded an increase of 38basis points when compared with the previous month. For the food inflation rate (23.72%), the highest increases were recorded in bread, cereals, meat, oil and fat, potatoes, yam, and other tubers.
On a year-on-year (y/y) basis, imported food price inflation increased by 9 basis points to 18.08 per cent y/y from 17.99 per cent y/y recorded in the previous month.
Core inflation increased by 16 basis points to 17.76 percent y/y from 17.60 per cent y/y recorded in the previous month. For the core inflation, price pressure was felt across gas, liquid fuel, garments, fuel, and passenger transport by air, and vehicle spare parts.
The housing water, electricity, gas, and other fuel segment increased by 16.84 percent y/y and 1.30 percent m/m. The transport segment also recorded an increase of 19 percent y/y but declined to 1.47 percent m/m. These increases in the transport segment y/y can be partly attributed to the price hikes in deregulated products such as diesel, kerosene, and aviation fuel.
“We expected the m/m food price increases to remain at or above 1.5%, given the expected disruption in the supply of food products due to the incidents of flooding across states in the middle belt (i.e. the food basket region) as well as increased cost of importation on the back of persistent fx depreciation in the parallel market,” analysts at Coronation Merchant Bank wrote in an emailed comments.
Citing the Central Bank of Nigeria (CBN) estimates, the analysts added that the apex bank’s in-house estimates suggest that inflation is expected to maintain its upward trend, driven by exchange rate pressure, build-up of increased spending and demand for naira on the back of the upcoming 2023 general elections, among others.
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