Inflation Rate Jumps To 13.22%, Records Highest Hit Since Oct 2016

The consumer price index, (CPI) which measures inflation rate increased by 13.22 per cent (year-on-year) in August 2020. This is 0.40 per cent points higher than the rate recorded in July 2020 (12.82 per cent).

Increases were recorded in all COICOP divisions that yielded the Headline index.

Brandnewsday learned that on a month-on-month basis, the Headline index increased by 1.34 per cent in August 2020. This is 0.09 per cent higher than the rate recorded in July 2020 (1.25 per cent).

The percentage change in the average composite CPI for the twelve months period ending August 2020 over the average of the CPI for the previous twelve months period was 12.23 per cent, representing a 0.18 per cent point rise from 12.05 per cent recorded in July 2020.

Inflation Rate Increased

The urban inflation rate increased by 13.83 per cent (year-on-year) in August 2020 from 13.40 per cent recorded in July 2020, while the rural inflation rate increased by 12.65 per cent in August 2020 from 12.28 per cent in July 2020.

On a month-on-month basis, the urban index rose by 1.42 per cent in August 2020, up by 0.15 from 1.27 per cent recorded in July 2020, while the rural index also rose by 1.27 per cent in August 2020, up by 0.04 from the rate recorded in July 2020 (1.23 per cent).

The corresponding twelve-month year-on-year average percentage change for the urban index was 12.85 per cent in August 2020. This is higher than 12.66 per cent reported in July 2020, while the corresponding rural inflation rate in August 2020 was 11.66 per cent compared to 11.49 per cent recorded in July 2020.

Food Index

The composite food index rose by 16.00 per cent in August 2020 compared to 15.48 per cent in July 2020.

This rise in the food index was caused by increases in prices of Bread and cereals, Potatoes, yam and other tubers, Meat, Fish, Fruits, Oils and fats and Vegetables.

On a month-on-month basis, the food sub-index increased by 1.67 per cent in August 2020, up by 0.15 per cent points from 1.52 per cent recorded in July 2020.

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The average annual rate of change of the Food sub-index for the twelve-month period ending August 2020 over the previous twelve-month average was 14.87 per cent, representing a 0.24 per cent points increase from the average annual rate of change recorded in July 2020 (14.63 per cent).

All Items Less Farm Produce

The “All items less farm produce” (or Core inflation), which excludes the prices of volatile agricultural produce stood at 10.52 per cent in August 2020, up by 0.42 per cent when compared with 10.10 per cent recorded in July 2020.

On a month-on-month basis, the core sub-index increased by 1.05 per cent in August 2020. This was up by 0.30 per cent when compared with 0.75 per cent recorded in July 2020.

The highest increases were recorded in prices of Passenger transport by air, Hospital services, Medical services, Pharmaceutical products, Maintenance and repair of personal transport equipment, Vehicle spare parts, Motor cars, Passenger transport by road, Miscellaneous services relating to the dwelling, Repair of furniture and Paramedical services.

The average 12-month annual rate of change of the index was 9.64 per cent for the twelve-month period ending August 2020. This is 0.16 per cent points higher than 9.48 per cent recorded in July 2020.

State Profiles

In analysing price movements under this section, note that the CPI is weighted by consumption expenditure patterns which differ across states. Accordingly, the weight assigned to a particular food or non-food item may differ from state to state making interstate comparisons of consumption basket inadvisable and potentially misleading.

All Items Inflation

In August 2020, all items index on year on year basis was highest in Kogi (17.29%), Bauchi (15.77%) and Ebonyi and Yobe (14.71%), while Lagos (11.45%), Kwara (11.22%) and Abuja (11.17%) recorded the slowest rise in headline Year on Year inflation.

On month on month basis, however, all items inflation was highest in Ondo (2.20%), Ogun (2.07%) and Abia (1.87%), while Plateau (0.72%), Zamfara (0.60%) and Sokoto (0.54%) recorded the slowest rise in headline month on month inflation.

Food Inflation

In August 2020, food inflation on a year on year basis was highest in Kogi (22.03%), Kwara (19.11%) and Edo (17.95%), while Gombe (14.33%), Kano (13.99%) and Bauchi (13.42%) recorded the slowest rise.

On month on month basis, however, food inflation was highest in Ogun (3.27%), Lagos (3.13%) and Abia (2.81%), while Plateau (0.67%), Zamfara (0.24%) and Sokoto (0.13%), recorded the slowest rise.