Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macro-Economic News
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macro-Economic News
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Opinions Blurb

Why A Drop In Inflation Does Not Necessarily Mean A Drop In Prices Of Commodities

Ugodre Obi-chukwubyUgodre Obi-chukwu
4 years ago
in Blurb, Financial Literacy
shopping mall prices
Share on FacebookShare on TwitterShare on Linkedin

Six years ago, in the third week of July to be precise; the National Bureau of Statistics (NBS) reported inflation rate dropped to 8.5%. A lot of people took the news with a pinch of salt pointing to the ever increasing prices of commodities.

That year, I read a few commentaries where analysts complain about the seemingly contradictory nature of a drop in inflation and a rise in prices of commodities. From experience, I have observed that people just don’t understand why the Bureau of Statistics will tell us inflation has reduced yet prices of commodity never dropped.

Like 2013, Like 2019

It’s a quandary for some. However, the DG of the Statistics Bureau (that year, in a bid to clear this economic mass-misunderstanding) explained the difference between inflation and a rise in prices of commodities. Digging up the archive all again, see excerpts of his explanation;

“Inflation is not a reduction in prices; inflation is a rise in prices. When you say it has gone down, it means the rise this time is not as much as the previous time.

Inflation and price fall

[Discover: Top signs to know if your salary is not enough]

Talking Economics

“Inflation (fall) is the slowdown in the rise of price; it is not a reduction in price as most people think. Price rise is actually a good thing but you have to ensure that the extent of that price rise is reasonable and going at a sustainable pace,” he explained.

what is inflation fall?

The Big Illustration

Furthermore, the NBS boss explained: “If your price is N100 and it goes to N200 last month and this month it goes to N250, this difference is N50 compared to N100 but it has still risen. All it is showing is that the rise is slower than previously.”

Moving Forward

Coming back to the present against the inflation drop news, I guess this piece puts the matter to bed once and for all.

[Don’t Miss: Top signs to know if your salary is not enough]1

Related

Tags: Financial Turotialsinflation rateNews Review

Comments 2

  1. Divine says:
    July 17, 2019 at 11:03 am

    I have a problem with this explanation. Inflation, as I know it, is the change in price as against a base. For example if the base year is 2015 and the price of say a bag of rice is N100 in 2015 if then, in 2016 the bag of rice increases to N110 we can say the inflation rate is 10% and if in 2017 a bag of rice sells for N150 we can say the inflation rate is 50%.
    If this is correct, then a rise (or reduction) in inflation rate would suggest a rise (or reduction) in price

    Reply
  2. James olua says:
    November 30, 2021 at 10:48 am

    I want a loan please I just started business so I can increase my profit no one here to help me out please help me

    Reply

Leave a Reply Cancel reply

HFM
Mega Millions
Mega Millions
Patricia





NM newsletters

Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

Recent News

  • AXA Mansard reports N3.63 billion pre-tax profit for FY 2022
  • High demand pushes cost of international student accommodation up by 8% in 2022 -Report
  • Elon Musk admits it’s “tough” saving Twitter, and being CEO of SpaceX and Tesla

Follow us on social media:

Recent News

AXA Mansard reports N3.63 billion pre-tax profit for 2022

AXA Mansard reports N3.63 billion pre-tax profit for FY 2022

February 6, 2023
High demand causes 8% increase in cost of international student accommodation

High demand pushes cost of international student accommodation up by 8% in 2022 -Report

February 6, 2023
  • Home
  • Exclusives
  • Markets
  • Industries
  • Economy
  • Business News
  • Financial Literacy
  • Lifestyle
  • Opinions

© 2023 Nairametrics

No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macro-Economic News
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds

© 2023 Nairametrics