Inflation rate hits 23-month high at 12.26%

The National Bureau of Statistics on Tuesday said the Consumer Price Index, which measures inflation, rose by 12.26 per cent year-on-year in March.

The bureau, in the CPI report, said the 12.26 per cent inflation for March is 0.06 percentage points higher than the 12.2 per cent recorded in February.

This is the highest inflation rate to be recorded by the economy in the last 23 months.

The last time the index was as high as this was in April 2018 when the inflation rate was put at 12.48 per cent.

The report said the lockdown in Abuja, Lagos and Ogun states which started in April and various major disruptions in normal economic activity in several states would not have any major impact on March inflation, which the report focused on.

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On a month-on-month basis, the NBS said the index increased by 0.84 per cent in March. This is 0.05 per cent higher than the 0.79 per cent recorded in February.

It said, “The consumer price index, which measures inflation increased by 12.26 percent (year-on-year) in March 2020.

“This is 0.06 per cent points higher than the rate recorded in February 2020 (12.20) per cent.”

The NBS report put the urban inflation rate at 12.93 per cent year-on-year in March, compared to 12.85 per cent recorded in February.

On the other hand, it said rural inflation rate rose to 11.64 per cent in March from 11.61 per cent in February.

In terms of food inflation, it said the index rose to 14.98 per cent in March as against the 14.9 per cent recorded in February.

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“This rise in the food index was caused by increases in prices of bread and cereals, fish, potatoes, yam and other tubers, oils and fats, vegetables, and fruits,” the report added.

For states with the highest rise in inflation, the report said Bauchi recorded 15.55 per cent in CPI; Niger, 14.04 per cent; and Kebbi, 13.90 per cent.

On the other hand, it said Lagos with 10.82 per cent, Abuja (10.19 per cent) and Kwara (9.94 per cent) recorded the slowest rise in headline year on year inflation.

The Central Bank Governor, Godwin Emefiele, had said the rise in inflation in the last six months was due to structural factors.

He gave some of the structural factors to include border protection policy, disruptions and challenges around food production belts, and pass-through effect from the recent increase in Value Added Tax.

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Emefiele had said, “Domestic price levels maintained an upward trend, for the sixth consecutive month, due essentially to structural and supply factors.

 “Year-on-year headline inflation rose to 12.2 per cent in February 2020 from 12.1 percent in January, reflecting rises in both food and core components.

 “This is attributable, in part, to border protection policy, disruptions and challenges around food production belts, and pass-through from the recent VAT increase.

“Short-term outlook suggests a gradual but continuously rising inflationary pressure.”

 He added that this may be aggravated by the inherent infrastructural deficits and emergent forex market pressures, especially as oil receipts dwindled and capital outflows persisted.

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