Nigeria’s inflation rate rose to 22.79% in the month of June 2023, representing a 0.38% points increase from 22.41% recorded in the previous month.
This is contained in the recently released consumer price index report by the National Bureau of Statistics (NBS).
On a year-on-year basis, the Headline inflation rate was 4.19% points higher compared to the rate recorded in June 2022, which was 18.60%.
Key highlights
This shows that the Headline inflation rate (year-on-year basis) increased in June 2023 when compared to the same month in the preceding year (i.e., June 2022).
- Food and non-alcoholic beverages (11.81%) led the list of items that contributed to inflation based on the divisional level.
- Housing water, electricity, gas, and other fuel followed with 3.81%, while communication at 0.15% was the least on the list.
- The uptick in the inflation rate was largely driven by the food index, as food inflation accelerated to 25.25% in the review month compared to 24.82% recorded in May 2023.
- On a month-on-month basis, the Food inflation rate in June 2023 was 2.40%, this was 0.21% points higher compared to the rate recorded in May 2023 (2.19%).
The rise in Food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetable, milk, cheese, and eggs.
In the same vein, core inflation increased to 20.27% from 20.06% in the prior month.
The increase in the core index is on the back of the federal government’s petrol subsidy removal announcement, which saw the price of petrol increase from an average of N185/ltr to N500 per litre.
On a month-on-month basis, the core Inflation rate was 1.74% in June 2023. It stood at 1.81% in May 2023, down by 0.07%.
The highest increases were recorded in prices of passenger transport by air, gas, vehicle spare parts, liquid fuel, fuels, and lubricants for personal transport equipment, medical services, passenger transport by road, etc.
What to expect
A cursory look at the data showed that Nigeria’s inflation has been maintaining an uptrend in the last six months, following a brief decline recorded in December 2022.
According to the NBS, this is the highest rate recorded since September 2005. Inflation is expected to increase further in the coming months on the back of rising food prices.
Also, as the impact of the petrol subsidy removal and the floating of the exchange rate passes through consumer prices.