Nigerians have continued to experience a sharp hike in prices of foodstuff and other essential commodities over the last couple of months due to some government policies, among other factors. However, inflation as a broad measure of the increase in prices, and general cost of living over a given period, is a global phenomenon.
The inflation rate is calculated as the average price increase of a basket of selected goods and services on a month-by-month basis. However, deflation is a sustained downward movement of prices for goods and services.
According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate decelerated from June to July and then, to August.
There was a slowdown in the upward movement of inflation from 34.19% in June, to 33.40% in July, and 32.15% in August.
In this article, Tribune Online takes a look at the Inflation rate analysis in three months:
June inflation rate analysis
In June 2024, the headline inflation rate increased to 34.19% relative to the May 2024 headline inflation rate which was 33.95%. Looking at the movement, the June 2024 headline inflation rate showed an increase of 0.24% points when compared to the May 2024 headline inflation rate.
On a year-on-year basis, the headline inflation rate was 11.40% points higher compared to the rate recorded in June 2023, which was 22.79%.
This shows that the headline inflation rate (year-on-year basis) increased in June 2024 when compared to the same month in the preceding year (i.e. June 2023). Furthermore, on a month-on-month basis, the headline inflation rate in June 2024 was 2.31%, which was 0.17% higher than the rate recorded in May 2024 (2.14%). This means that in June 2024, the rate of increase in the average price level is higher than the rate of increase in the average price level in May 2024.
July inflation rate
The headline inflation rate eased to 33.40% in July 2024, relative to the June 2024 headline inflation rate of 34.19%. Looking at the movement, the July 2024 headline inflation rate showed a decrease of 0.8% points when compared to the June 2024 headline inflation rate. On a year-on-year basis, the headline inflation rate was 9.32% points higher compared to the rate recorded in July 2023, which was 24.08%. This shows that the headline inflation rate (year-on-year basis) increased in July 2024 compared to the same month in the preceding year (i.e., July 2023).
Furthermore, on a month-on-month basis, the headline inflation rate in July 2024 was 2.28%, which was 0.03% lower than the rate recorded in June 2024 (2.31%). This means that in July 2024, the rate of increase in the average price level was lower than the rate of increase in the average price level in June 2024.
August inflation rate
Recently, the NBS released the headline inflation rate for August 2024, showing a decrease of 1.25% points when compared to the July 2024 headline inflation rate. However, on a year-on-year basis, the headline inflation rate was 6.35% points higher compared to the rate recorded in August 2023 (25.80%).
This shows that the headline inflation rate (year-on-year basis) increased in August 2024 when compared to the same month in the preceding year (i.e., August 2023). Furthermore, on a month-on-month basis, the headline inflation rate in August 2024 was 2.22%, which was 0.06% lower than the rate recorded in August 2024 (2.28%). This means that in August 2024, the rate of increase in the average price level is lower than the rate of increase in the average price level in July 2024″.
According to the Consumer Price Index report released by the Bureau, the headline inflation rate eased to 32.15% in August 2024, while food inflation stood at 37.52% in the same month.
The inflation rate in Nigeria interprets economic growth; the higher the rate, the lower the chances of affordability. A high inflation rate indicates problems such as eroded purchasing power of the currency and potential stability risks in the financial system.
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