Inflation moderates slightly by 0.55% in March

For the second consecutive month, inflation declined albeit slightly in March according to data released by National Bureau of Statistics (NBS).

“On a Headline basis, the Consumer Price Index (CPI) which measures inflation increased by 17.26 percent (year-on-year) albeit at a slower pace in March 2017, 0.52 percent points lower from the rate recorded in February (17.78) percent.

“This is the second consecutive month of a decline in the headline CPI on a year on year basis, representing the effects of stabilising prices in already high food and non-food prices as well as favourable base effects over 2016prices.

It is also indicative of early effects of a strengthened naira in the foreign exchange rate market.

Price Increases were recorded in all COICOP divisions that yield the Headline Index.

However, the major divisions responsible for accelerating the pace of the increase in the headline index were Housing, Water, Electricity, Gas and Other Fuel, Education, Food and Alcholoic Beverages, Clothing and Footware and Transportation Services.

On a month-on-month basis, the Headline index increased by 1.72 percent in March 2017, 0.23 percent points higher from the rate recorded in February.

The Food Index increased by 18.44 percent (year-on-year) in March, slightly down 0.09 percent points from rate recorded in February (18.53) percent driven by increases in the prices of bread, cereals, meat, fish, potatoes, yams and other tubers and wine, while the slowest increase in food prices year on year were recorded by Soft Drinks, Fruits, Coffee, Tea and Cocoa.

It should be noted that the Headline Index is made up of the Core Index and Farm Produce items. As Processed Foods are included in both the Core and Food sub-indices; this implies that these sub-indices are not mutually exclusive.

Price movements recorded by All Items less farm produce or Core sub-index rose by 15.40 percent (year-on-year) in March, down by 0.60 percent points from rate recorded in February (16.00) percent.

During the month, the highest increases were seen in Miscellaneous services relating to the dwelling, electricity, solid fuels, clothing materials and other articles of clothing, Liquid fuel, Spirits as well as Fuels and lubricants for personal transport equipment.

The Urban index rose by 18.27 percent (year-on-year) in March from 18.57 percent recorded in February, and the Rural index increased by 16.47 percent in March from 16.98 percent in February.

On month-on-month basis, the urban index rose by 1.76 percent in March from 1.52 percent recorded in February, while the rural index rose by 1.69 percent in March from 1.47 percent in February.

The corresponding twelve-month year-on-year average percentage change for the urban index increased from 18.42 percent in February to 18.79 percent in March, while the corresponding rural index also increased from 15.70 percent in February to 16.05 percent in March.