Headline Inflation rate jerks up to 12.20% in February
Headline inflation surged 7 basis points (bps) to 12.20% driven by year on year increases in food and core inflation, the National Bureau of Statistics has revealed.
According to the Bureau, average food prices surged by 5 bps to 14.90% in February 2020.
This was due to rise in prices of food and non-alcoholic beverage, plus an increase in the prices of imported food items.
Food and non-alcoholic beverage sub-index rose year on year by 6 bps, from 14.76% in January 2020 to 14.82% in February 2020.
Month on month, the sub-index declined to 0.87% from 0.98% in January 2020.
“While we believe that a base effect drove the year on year increase. Month-on-month, we think that the general price increases followed the sustained land border closure waned.
“Hence, overshadowed the impact of VAT increment on prices”, analysts held.
The imported food sub-index increased year on year by 4 bps to 16.14% in February 2020, also contributing to the increase in the food index, but MoM, the sub-index was flat at 1.26%.
According to the Food and Agriculture Organisation (FAO) of the United Nations, the FAO food price index rose year on year by 8.10%
On month on month, it by 1.00% which was in tandem with the imported food sub-index.
Core inflation grew by 8 bps to 9.43% in February 2020 notably driven by increases in housing water, electricity, gas and other fuel; clothing and footwear as well as transport.
However, all composites of the core index recorded year on year increases.
Analysts believe that the primary driver of the hikes is as a result of a low base and partly the VAT increment.
WSTC Securities expects an uptrend in inflation in the coming months on the back of the proposed adjustment in electricity tariff.
“We expect the disruption in the global supply chain occasioned by the coronavirus pandemic to exert price pressures on commodities, particularly on the imported products, analysts said.
They said that the disease outbreak has so far been contained in Nigeria, a surge in reported cases would also exert upward pressure in prices due to panic buying.
Food inflation increased year-on-year by 5 bps to 14.90% in February 2020 from 14.85% in January 2020.
Month-on-month, the index rose to 0.87%, relative to 0.99% recorded in January 2020.
The increase recorded in the index were contributed by price increases in bread & cereals; fish; meat; vegetables; and oil & fats.
More so, core inflation increased by 8 bps year-on-year to 9.43% in February 2020 from 9.35% in January 2020.
Meanwhile, month-on-month, the index increased to 0.73%, from 0.82% in January 2020.
The major price increases were recorded in Catering services; Non-durable household goods; Passenger transport air and Vehicle Spare Parts.
Then, Pharmaceutical products; Repair of furniture; Water supply; Carpet and other floor coverings.
It also include major household appliances; Dental services; Maintenance and repair of personal transport equipment; and Hospital services.
Headline Inflation rate jerks up to 12.20% in February
