The National Bureau of Statistics reported last week that Nigeria’s inflation rate rose 16.01% for the month of August 2017. This compares to the 16.05% inflation rate for the month of July 2017 and the 7th consecutive month of a slow down in the rise in inflation rate.
Highlights of the August Inflation Rate;
- The food index stood at 20.25% (year-on-year) in August, down marginally by 0.03% from 20.28% recorded in July. The index increased by 1.14% month-on-month in August lower than the 1.52% printed in the month of July. The rise in the index was caused by increases in prices of bread and cereals, meat, fish, oils and fats, coffee, tea and cocoa. Average annual change in the food sub-index for the 12month period ending in August stood at 18.57% in July from 18.25% recorded in July.
- The Urban index rose by 0.09% to 16.13% (year-on-year) in August from 16.04% recorded in July, and the Rural index increased to 15.91% in August from 16.08% in July. On month-on-month basis, the urban index rose 0.95% in August though lower than the increase of 1.18% recorded in July, while the rural index inched lower to 16.58% in August from 16.60% in July. Average 12month change for the urban and rural indexes stood at 18.15% and 16.58% in August compared to 18.43% and 16.60% in July respectively.
- Core sub-index which excludes the prices of volatile agricultural produce eased by 0.10% during the month of August to 12.30% from 12.20% in July as all key divisions which contributes to the index increased. On a month-on-month basis, the Core sub-index increased by 0.93% in August, 0.07% lower than the 1.00% recorded in July. The highest increases were recorded in clothing materials and articles of clothing, garments, passenger transport by air, motorcycles, shoes and other footwear, furniture and furnishing, books and stationary, non-durable household goods, pharmaceutical products and maintenance, repair of personal transport equipment and glassware, tableware & household utensils.
- We anticipate further decline in the headline inflation for the eight straight month in September. This expectation is to be determined by relative stability in exchange rate, drop in carrying costs for manufacturers as inventory cycles slip especially as the festive season draws closer. Similarly, food prices are to inch lower with minor exceptions in processed foods and commodities like rice and palm oil. The harvest season is anticipated to commence in September however, there will be a lag on the impact between the start of the season and when increased supply would manifest.