Flash: Inflation Rate Drops For The First Time In 15 Months

Nairametrics| The National Bureau of Statistics has released its 2017 February Consumer Price Index revealing that Nigeria’s inflation rate increased by 17.78 percent for the period under review. This is the first time the inflation rate has dropped in 15 Months.

Here are the key highlights

• On a Headline basis, the Consumer Price Index (CPI) which measures inflation increased by 17.78 percent (year-on-year) albeit at a slower pace in February 2017, 0.94 percent points lower from the rate recorded in January (18.72) percent.
• On a month-on-month basis, the Headline index increased by 1.49 percent in February 2017, 0.48 percent points higher from the rate of 1.01 percent recorded in January.
• The drop in inflation rate was mainly due to a significant drop in the Core Inflation Sub-index. Core inflation, which includes every item except food, rose the slowest at 16 percent.
• Analysts also attribute the drop to base effects, a situation where a higher inflationary period in the corresponding year will result in slower growth a year after.

Food Index

• The Composite Food Index rose by 18.53 percent in February 2017. The rise in the index was driven by increases in the prices of bread, cereals, meat, fish, potatoes, yams and other tubers, vegetables, wine, milk, cheese and eggs, Sugar, jam, honey, chocolate and confectionery and fruit.
• On a month-on-month basis, the Food sub-index increased by 1.99 percent in February, up by 0.7 percent points from 1.29 percent recorded in January.
• The average annual rate of change of the Food sub-index for the twelvemonth period ending in February 2017 over the previous twelve-month average was 16.13 percent, 0.59 percent points from the average annual rate of change recorded in January (15.54 percent).

Core Inflation

• The ‘’All Items Less Farm Produce’’ or Core sub-index, which excludes the prices of volatile agricultural produce eased by 16.0 percent during the month o February 2017, 1.90 percent points from 17.90 percent recorded in January as all key divisions which contributes to the index increased at a slower rate.
• On a month-on-month basis, the Core sub-index increased by 1.10 percent in February, 0.42 percent points higher from 0.68 percent recorded in January. The average 12-month annual rate of rise of the index was recorded at 16.44 percent for the twelve-month period ending in February 2017, 0.40 percent points higher from the twelve month rate of change recorded in January.