Economy: Inflation Rate reduces, Now to 17.26%

For the second consecutive month, the inflation rate maintained its decline, falling by 0.52 per cent to 17.26 in March from 17.78 per cent in February, having peaked at 18.72 per cent in January.

Although on a headline basis, the Consumer Price Index (CPI), which measures inflation increased by 17.26 per cent (year-on-year), it happened at a slower pace in March, the National Bureau of Statistics (NBS) said on Thursday in its CPI report for the month under review.

According to the NBS, the decline was indicative of the effects of stabilising prices in an already high food and non-food prices environment, as well as favourable base effects over 2016 prices.

“It is also indicative of early effects of a strengthened naira in the foreign exchange market.
“Price increases were recorded in all COICOP divisions that yield the headline index.

“However, the major divisions responsible for accelerating the pace of the increase in the headline index were housing, water, electricity, gas and other fuel, education, food and alcoholic beverages, clothing and footwear, and transportation services,” the NBS said.

On a month-on-month basis, the headline index increased by 1.72 per cent in March 2017, 0.23 percentage points higher than the rate recorded in February.

The food index increased by 18.44 per cent (year-on-year) in March, slightly down by 0.09 percentage points from 18.52 per cent recorded in February.

This was driven by increases in the prices of bread, cereals, meat, fish, potatoes, yams and other tubers and wine, while the slowest increase in food prices year-on-year were recorded by soft drinks, fruits, coffee, tea and cocoa.
The headline index is made up of the core index and farm produce items.

Processed foods are included in both the core and food sub-indices. This implies that these sub-indices are not mutually exclusive, the NBS emphasised.

However, price movements recorded by all items less farm produce or core sub-index rose by 15.40 per cent (year-on-year) in March, down by 0.60 percentage points from 16 per cent in February.

During the month under review, the highest increases were seen in miscellaneous services relating to dwelling, electricity, solid fuels, clothing materials and other articles of clothing, liquid fuel, spirits as well as fuels and lubricants for personal transport equipment.

NBS said the urban index rose by 18.27 percent (year-on-year) in March from 18.57 per cent recorded in February while the rural index increased by 16.47 per cent in March from 16.98 per cent in February.

On a month-on-month basis, the urban index rose by 1.76 per cent in March from 1.52 per cent recorded in February, while the rural index rose by 1.69 per cent in March from 1.47 per cent in February