Inflation drops to 15.91% as hike in food prices eases

Petty traders selling food items in one of the markets in Lagos

The Consumer Price Index (CPI), which measures inflation dropped to 15.91 percent (year-on-year) last month. This represents 0.07 percent points lower than the rate recorded in September (15.98) percent.

It is the ninth consecutive disinflation (slowdown in the inflation rate though still positive) in headline year-on-year inflation since January 2017.

According to the latest data from the National Bureau of Statistics (NBS) yesterday, while average headline year on year inflation for the first five months of the year (January to May 2017) stood at 17.45 percent, average headline year on year inflation for the next five months of the year (June to October 2017), stood at 16.01 percent indicating disinflation from June to date, compared to from January to May 2017.

On a month-on-month basis, the headline index increased by 0.76 percent in October 2017, 0.02 percent points lower from the rate of 0.78 per cent recorded in September. This represents the fifth consecutive month on month contraction in headline inflation since May 2017.

In terms of food inflation, high food price and food price pressure continued into September though generally at a slower pace.

The Food Index increased by 20.31 percent (year-on-year) in October, down marginally by 0.01 percent points from the rate recorded in September (20.32 percent).

The rise in the food index last month was caused by increases in prices of bread and cereals, meats, oils and fats, coffee tea and cocoa, milk cheese and eggs, vegetables and fish.

While average year-on-year food inflation for the first five months of the year (January to May 2017) stood at 18.67 percent, average year on year food inflation for the next five months of the year (June to October 2017), was higher at 20.22 percent indicating higher food price inflation on average in the second five months of the year compared to the first five months.

On a month-on-month basis, the food sub-index increased by 0.85 percent in October, down from 0.87 percent recorded in August. This represents the fifth consecutive disinflation in month-on-month inflation since a 2017 high of 2.57 per cent in May 2017. October 2017 also represents the lowest recorded month-on- month inflation since September 2016.

The ‘’All Items less Farm Produce’’ or Core sub-index, which excludes the prices of volatile agricultural products, stood during the month of October at 12.14 percent points from 12.12 percent recorded in September as all key divisions which contributes to the index increased.

While average year on year core inflation for the first five months of the year (January to May 2017) stood at 15.41 percent, average year on year core inflation for the next five months of the year (June to October 2017), was lower at 12.24 per cent.

Similarly, the Urban index rose by 16.19 percent (year-on-year) in October 2017, up by 0.01 percent point from 16.18 percent recorded in September and the Rural index increased by 15.67 percent in October 2017 down from 15.81 percent in September 2017.

On month-on-month basis, the urban index rose by 0.82 percent in October 2017, down from 0.84 percent recorded in August, while the rural index rose by 0.72 percent in October 2017, down from 0.74 percent in September.

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