CPPE worried over renewed acceleration in food inflation

•calls for sustained moderation in prices

The Centre for Promotion of Private Enterprise (CPPE) has expressed concerns over the renewed acceleration in food inflation as reported by the National Bureau of Statistics (NBS) in its recently released June Inflation Report.

This centre, therefore, called for sustained moderation of food prices so as to improve welfare and strengthen public confidence in the reform process.

The report by NBS revealed that Year-on-Year food inflation increased from 17.43 percent to 17.52 percent, while month-on-month food inflation rose sharply from 2.98 percent to 3.75 percent, marking the strongest monthly increase in several months.

Describing the development as suggesting food prices had resumed an upward trajectory after a brief period of moderation, the centre, in a statement by its Chief Executive Officer, Dr. Muda Yusuf, noted that such could have significant economic and social implications.

According to CPPE, food inflation remains the greatest driver of the cost-of-living crisis, since it erodes household purchasing power, worsens poverty and food insecurity, and weakens the inclusiveness of the current reform programme.

The centre, however, hailed the continued easing of core inflation, describing it as reflecting the positive impact of exchange-rate stability and improved macroeconomic conditions in moderating imported inflation and broader non-food price pressures.

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On the persistence of urban inflation, which stood at 16.08 percent Year-on-Year, exceeding the national headline rate of 15.91 percent, and with Month-on-Month increase from 1.99 percent to 2.13 percent; the centre believed the development showed that inflationary pressures remain particularly intense in the nation’s urban centres.

“The rising urban inflation may partly reflect increasing population displacement from rural communities affected by insecurity.

“As more households migrate to urban areas, demand for housing, transportation, utilities and other essential services rises, adding to inflationary pressures and related urbanisation challenges,” it added.

The Centre, therefore, stressed the need for government to address insecurity in farming communities, since that has become important, not only for the safety of lives and properties and boosting agricultural output, but also easing cost pressures in the cities.