Cost of Living Rises as Inflation Worsens

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There seems to be no end in sight to the rising cost of living in Nigeria as headline inflation for the month of May expanded by 6 basis points to sustain its two-digit stance at 12.40 per cent. The figure in May, according to analysts, was the steepest price growth the country has recorded since July 2017. Bamidele Famoofo reports

These are not good times for Nigerians as the rising cost of daily needs especially foods continue to rise. The figure of headline inflation released by the National Bureau of Statistics (NBS) in May, the most recent of such, increased to 12.40 percent, expanding 6 basis points from 12.34 percent recorded in April.

According to analysts at Cordros Research, the growth in May was the sharpest recorded since July 2017 month- on- month.

“From a month ago, the headline inflation increased by 15bps to 1.17 per cent, steepest pace of price growth since July 2017,” Cordros noted.

Food inflation rose to 15.04 per cent year on year in May compared to 15.03 per cent year-on-year in the preceding month. According to the NBS, the rise was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, oils and fats, fruits, fish and meat. Compared to April 2020, food inflation expanded by 24 basis points, to 1.42 per cent month-on-month.

“Core inflation posted a similar outturn, as the basket was up by 14bps to 10.12 per cent. Most of the pressures in the month were recorded in the prices of pharmaceutical products, medical services, repair of furniture, hospital services, passenger transport by road, motor car, bicycles, maintenance and repair of personal transport equipment, passenger transport by sea and inland waterways, paramedical services, motorcycles, and hairdressing salons and personal grooming establishment. On a month-on-month basis, the core index was down by 5bps 0.88 percent,” NBS disclosed.

Increases were recorded in all COICOP divisions that yielded the headline index.

On month-on-month basis, the headline index increased by 1.17 per cent in May 2020, this is 0.15 per cent rate higher than the rate recorded in April 2020 (1.02) per cent.

The urban inflation rate increased by 13.03 per cent (year-on-year) in May 2020 from 13.01 per cent recorded in April 2020, while the rural inflation rate increased by 11.83 percent in May 2020 from 11.73 per cent in April 2020.

On a month-on-month basis, the urban index rose by 1.18 per cent 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 per cent reported in April 2020, while the corresponding rural inflation rate in May 2020 is 11.26 per cent compared to 11.20 per cent 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 per cent, showing 0.08 per cent point from 11.71 per cent recorded in April 2020.

The consumer price index, (CPI) which measures inflation increased by 12.40 per cent (year-on-year) in May 2020. This is 0.06 per cent points higher than the rate recorded in April 2020 (12.34) per cent.

The composite food index rose by 15.04 per cent year-on-year in May 2020 compared to 15.03 per cent in April 2020.

This rise in the food index was caused by increases in prices of bread and cereals, Potatoes, Yam and other tubers, oils and fats, fruits, fish and meat.

The average annual rate of change of the food sub-index for the twelve-month period ending May 2020 over the previous twelve-month average was 14.33 per cent, 0.11 points from the average annual rate of change recorded in April 2020 (14.22 per cent).

On month-on-month basis, the food sub-index increased by 1.42 percent in May 2020, up by 0.24 percent points from 1.18 per cent recorded in April 2020.

On month-on-month basis, the core sub-index increased by 0.88 percent in May 2020. This was down by0.05 per cent when compared with 0.93 per cent recorded in April 2020.

The ‘’All items less farm produce’’ or core inflation, which excludes the prices of volatile agricultural produce stood at 10.12 percent in May 2020, up by 0.14 per cent when compared with 9.98 per cent recorded in April 2020.

The average 12-month annual rate of change of the index was 9.27 per cent for the twelve-month period ending May 2020; this is 0.1 per cent points higher than 9.17 per cent recorded in April 2020.

ALL ITEMS LESS FARM PRODUCE

In May 2020, all items inflation on year on year basis was highest in Rivers (14.91per cent), Bauchi (14.46 per cent) and

Ebonyi, Kogi and Plateau (13.87 per cent), while Benue (11.13 per cent), Adamawa (11.10 per cent) and Kwara (10.58 per cent) recorded the slowest rise in headline Year on Year inflation.

On month on month basis however, May 2020 all items inflation was highest in Bayelsa (2.33 per cent), Delta (2.03 per cent) and Ebonyi (2.00 per cent), while Oyo (0.48 per cent), Akwa Ibom (0.47 per cent) and Zamfara (0.35 per cent) recorded the slowest rise in headline month on month inflation.

In May 2020, food inflation on a year-on-year basis was highest in Abuja (18.13 per cent), Osun (17.40 per cent) and Imo (17.13 per cent), while Abia (13.46 per cent), Bauchi (12.97 per cent) and Kaduna (12.97 per cent) recorded the slowest rise.

On month-on-month basis, however, May 2020 food inflation was highest in Ebonyi (3.43 per cent), Bayelsa (3.21 per cent) and Edo (2.74 per cent), while Zamfara (0.22) and Abia (0.21 per cent) recorded the slowest rise with Akwa Ibom recording price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate).