Movement In The Consumer Price Index As Nigeria Inflation Rate Hits 15.99%

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The Nigeria inflation rate (year-on-year) is to depreciate marginally to 15.99% in August 2017 from 16.05% in the month of July 2017 according to source. The marginal depreciation which occurs for the first time after five consecutive quarters.

The expected decrease in the inflation rate is largely attributed to the downward movement in some categories of non-food items in the Consumer Price Index (CPI) basket, as well as decrease in some food prices. Based on the data release calendar on the website of the National Bureau of Statistics (NBS), it is expected the release of the inflation rate for the month of August on the 15th of September 2017.

The monthly Food Price Index (FPI) that the Food and Agriculture Organization (FAO) released today indicates that the Index averaged 176.6 points in August 2017, 1.30% lower than the July 2017 value.

The  decline in the FPI for August 2017 reflected generally lower values for cereals, sugar and meat than prior month and more than compensated for the increase in the vegetable oil and dairy prices. The FAO Sugar Price Index decreased by 1.7% in August, from July 2017 and has been on downward trend since the beginning of 2017. The decline in the FAO Sugar Index was mainly driven by favourable prospects for cane harvests in major producing countries.

The FAO Cereal Price Index was also down by 5.40% in August 2017. Cereal prices was driven downwards by large global supplies. The FAO Meat Index was also down by 1.2% in August, compared with July figure. On the flip side, The FAO Vegetable Oil Price Index was up by 2.50%, driven by rising quotations for palm oil and soy oil (Statements from FAO).

The movement in the prices of food items during the month resulted in 1.19% increase in our Food and Non-Alcoholic Index to 251.83 points. Our Food and Non-Alcoholic Index increased by 20.23% to 251.83 in August 2017, compared with 209.45 in August 2016. Housing, Water, Electricity, Gas and Other Fuels; Transport; and Furniture and Household Equipment Maintenance Indices increased at various magnitude during the period.

Our model indicates that the general price movement in the consumer goods and services in August 2017 increased the Composite Consumer Price Index (CCPI) to 239.27 points, representing a month-on-month increase of 0.95%. We estimate that the increase in the CCPI in August 2017 would produce an inflation rate of 15.99% marginally lower than the 16.05%

By Tola Adebayo