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NBS: Food items, services push inflation to 13.22%

The consumer price index (CPI), which measures inflation, sustained its upward movement in August, hitting 13.22 per cent from the previous July figure of 12.82 per cent. The new figure released yesterday by National Bureau of Statistics (NBS) indicates a 0.40 per cent increase.

The latest push in inflation is not unconnected with skyrocketing prices of various consumables and services. This rise in food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, oils and fats and vegetables.

The Federal Government recently approved increase in electricity tariff and pump price of Premium Motor Spirit (PMS) commonly known as petrol. While August inflation was being expected, economic analysts had predicted that rise in inflation should be expected given series of hikes effected on foods and services. According to NBS, increases were recorded in all divisions that yielded the headline index. On a month-on-month basis, the headline index increased by 1.34 per cent in August 2020. This is 0.09 per cent higher than the rate recorded in July 2020 (1.25%).

The percentage change in the average composite CPI for the 12-month period ending August 2020 over the average of the CPI for the previous 12 months period was 12.23 per cent, representing 0.18 per cent point rise from 12.05 per cent recorded in July 2020.

The urban inflation rate increased by 13.83 per cent (year-on-year) in August 2020 from 13.40 per cent recorded in July 2020, while the rural inflation rate increased by 12.65 per cent in August 2020 from 12.28 per cent in July 2020. On a month-on-month basis, the urban index rose by 1.42 per cent in August 2020, up by 0.15 from 1.27 per cent recorded in July 2020, while the rural index also rose by 1.27 per cent in August 2020, up by 0.04 per cent from the rate recorded in July 2020 (1.23%). “The corresponding 12-month year-on-year average percentage change for the urban index was 12.85 per cent in August 2020.

This is higher than 12.66 per cent reported in July 2020, while the corresponding rural inflation rate in August 2020 was 11.66 per cent compared to 11.49 per cent recorded in July 2020,” NBS data revealed. The bureau reported an increase in composite food Index in the month under review. Composite food index rose by 16 per cent in August 2020 compared to 15.48 per cent in July 2020.

“This rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, oils and fats and vegetables,” the report stated. On month-on-month basis, the food sub-index increased by 1.67 per cent in August 2020, up by 0.15 per cent points from 1.52 per cent recorded in July 2020.

The average annual rate of change of the food sub-index for the 12-month period ending August 2020 over the previous 12-month average was 14.87 per cent, representing a 0.24 per cent points increase from the average annual rate of change recorded in July 2020 (14.63 %) There was also increase in core inflation, which excludes the prices of volatile agricultural produce. It stood at 10.52 per cent in August 2020, up by 0.42 per cent when compared with 10.10 per cent recorded in July 2020. On month-on-month basis, the core sub-index increased by 1.05 per cent in August 2020. This was up by 0.30 per cent when compared with 0.75 per cent recorded in July 2020.

The highest increases were recorded in prices of passenger transport by air, hospital services, medical services, pharmaceutical products, maintenance and repair of personal transport equipment, vehicle spare parts, motor cars, passenger transport by road, miscellaneous services relating to the dwelling, repair of urniture and paramedical services.

In computing inflation trend state by state, NBS record showed the result differed. On year-on-year basis, inflation was highest in Kogi (17.29%), Bauchi (15.77%), Ebonyi and Yobe (14.71%), while Lagos (11.45%), Kwara (11.22%) and Abuja (11.17%) recorded the slowest rise in headline year-onyear inflation.

On month-on-month basis, however, all items inflation was highest in Ondo (2.20%), Ogun (2.07%) and Abia (1.87%), while Plateau (0.72%), Zamfara (0.60%) and Sokoto (0.54%) recorded the slowest rise in headline month-on-month inflation. On food inflation, on a year-on-year basis, it was highest in Kogi (22.03%), Kwara (19.11%) and Edo (17.95%), while Gombe (14.33%), Kano (13.99%) and Bauchi (13.42%) recorded the slowest rise. On month-on-month basis, however, food inflation was highest in Ogun (3.27%), Lagos (3.13%) and Abia (2.81%), while Plateau (0.67%), Zamfara (0.24%) and Sokoto (0.13%), recorded the slowest rise.

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