Nigeria’s inflation rate rose to 12.26% in March 2020. This was disclosed in the latest inflation report released by the National Bureau of Statistics (NBS).
According to the NBS report, month on month, inflation rose by 12.26% in March 2020, higher than the rate (12.20%) recorded in February and 12.13% in January. The inflation rate rose for the 8th consecutive months as recession looms in the Nigerian economy amidst the rapid spread of COVID-19 pandemic
Food inflation, a closely watched component of the inflation index, rose by 14.98% in March 2020 compared to 14.90% in February 2020. According to the NBS, the 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.
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On a month-on-month basis, the food sub-index rose by 0.94% in March 2020, up by 0.07% points from 0.87% recorded in February 2020. The average annual rate of change of the Food sub-index for the twelve-month period ending March 2020 was 14.11% from February 2020 (13.98%).
Core inflation (All items less farm produce), which excludes the prices of volatile agricultural produce also rose 9.73% in March 2020, up by 0.3% when compared with 9.43% recorded in February 2020.
On a month-on-month basis, the core sub-index increased by 0.81% in March 2020. This was up by 0.07% when compared with 0.73% recorded in February 2020. Also, the average 12-month annual rate of change of the index was 9.11% for the twelve-month period ending March 2020; this is 0.02% points higher than 9.09% recorded in the previous month.
According to the NBS, the highest increases were recorded in prices of Passenger transport by air, Tobacco, Household textiles, Major household appliances, Domestic services and household services, Pharmaceutical products, Maintenance and repair of personal transport equipment, Water supply and Catering services.
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Recession looms amidst COVID-19 lock-down
The latest inflation (12.26%) released by the Bureau does not necessarily reflect current realities being witnessed in the Nigerian economy. According to the NBS, “the lock down in Abuja, Lagos and Ogun States coupled with various major disruptions in economic activity started in April, hence, no any major impact on March 2020 Inflation”.
Several states also announced lock-down, in a bid to flatten the curve of COVID-19 spread. Meanwhile, it should be noted that prices of food items have jumped due to restrictions in movement as Nigerians continue to grapple with the spiral effect of COVID-19. In an earlier article, Nairametrics had reported that the lock-down imposed by the government has disrupted the movement of food cargoes across the country and will ultimately lead to a food crisis.
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As COVID-19 pandemic continues to spread in Nigeria, the International Monetary Fund (IMF) has foretasted the country’s inflation at 13.4% by the end of 2020, with GDP expected to contract sharply by -3.4%. While the government continues to introduce several fiscal and monetary interventions to curtail the potential negative impacts of COVID-19, the Nigerian economy is expected to be largely underpinned by global economic headwinds.
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