Nigeria’s inflation skyrocketed to 24.08% in the month of July 2023, representing a 129 basis-point increase compared to 22.79% recorded in the previous month.
The latest figure, according to The Witness report, also represents the sixth consecutive increase in the headline index this year.
This is according to the recently released Consumer Price Index (CPI) report for July 2023 by the National Bureau of Statistics (NBS).
The jump comes on the back of removal of petrol subsidies and the unification/devaluation of the official exchange rate.
Notably, on a month-on-month basis, the headline inflation rate stood at 2.89% in July which was 0.76% higher than the rate recorded in June 2023 (2.13%).
In terms of contribution to the year-on-year inflation, Food and non-alcoholic beverages (12.47%) contributed the most, followed by housing water, electricity, gas and other fuel (4.03%), and clothing and footwear (1.84%).
Food inflation
The Food inflation rate rose to 26.98% in July 2023, representing a 1.73%-point increase from 25.25% recorded in the previous month and 4.97% points higher than 22.02% recorded in the corresponding period of 2022.
On a month-on-month basis, the food inflation rate in July 2023 was 3.45%, this was 1.06% higher compared to the rate recorded in June 2023 (2.4%).
The average annual rate of Food inflation for the twelve-month ending July 2023 over the previous twelve-month average was 24.46%, which was 5.71% points increase from the average annual rate of change recorded in July 2022 (18.75%).
The rise in Food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetable, milk, cheese, and eggs.
Core inflation
The “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 20.47% in July 2023 on a year-on-year basis; up by 4.41% when compared to the 16.06% recorded in July 2022.
On a month-on-month basis, the Core inflation rate was 2.11% in July 2023. It stood at 1.77% in June 2023, up by 0.34%.
The average twelve-month annual inflation rate was 18.84% for the twelve-month ending July 2023; this was 4.31% points higher than the 14.53% recorded in July 2022.
Expert’s View:
Lukman Otunuga, Senior Research Analyst at FXTM had predicted that “with the inflation beast drawing strength from rising food prices, transportation, and import costs, it is forecast to tick even higher for July. Ultimately, persistent signs of rising inflation may force the Central Bank of Nigeria to act once again at its next policy meeting in September”.
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