NBS: Inflation rises to 16.5% in June •Prices of imported goods rising faster

The National Bureau of Statistics (NBS), which released its June 2016 data on Monday morning said that in June, the Consumer Price Index (CPI) which measures inflation continued to record relatively strong increases for the fifth consecutive month.

The Headline index increased by 16.5% (year-on-year), 0.9% points higher from rates recorded in May (15.6%). While most COICOP divisions Which contribute to the Headline index increased at a faster pace, the increase was however weighed upon by a slower increase in three divisions; Recreation & Culture, Restaurant & Hotels, and Miscellaneous Goods & Services.

Despite the economic downturn leading to Federal and states governments being unable to finance development projects, states being unable to pay salaries and private companies laying off staff in droves, inflation continues its upward movement, rising to 15.6 per cent in June.

Official exchange rate for the naira fell freely from N199/US$ about one month ago to N292/US$ by the close of transaction last Friday.

The data showed that for the fifth consecutive month, Consumer Price Index (CPI) which measures inflation continued to record relatively strong increases.

NBS said the June figure was 0.9% points higher from rates recorded in May (15.6%).

It blamed increases in the energy sector for the rise but explained that the increase was weighed upon by a slower increase in three divisions; Recreation & Culture, Restaurant & Hotels, and Miscellaneous Goods & Services

“Year on year, energy prices, imported items and related products continue to be persistent drivers of the Core sub-index. The Core index increased by 16.2% in June, up by approximately 1.2% points from rates recorded in May (15.1%).

“During the month, the highest increases were seen in the Electricity, Liquid Fuel (kerosene), Furniture and Furnishings, Passenger Transport by Road, and Fuels and Lubricants for Personal Transport Equipment.”

While imported foods continue to increase at a faster pace, the Food sub index on the aggregate increased, albeit at a slower pace in June relative to May.

The index increased by 15.3% (year on year) in June up by 0.4% points from rates recorded in May. The index was weighted upon by a slower increase in the Vegetables and “Sugar, jam, honey, chocolate and confectionery” groups.

NBS said month-on-month, the Headline index has moved in a sideways fashion since February, the first month of a pronounced increase in rates this year. Specifically, in June, the index increased by 1.7%, lower by roughly 100 basis points from rates recorded in May.

The report 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.

Year on year, both the Urban and Rural indices increased albeit at a faster pace in June. The Urban index rose by roughly 100 basis points from 17.1% in May to 18.1% in June, while the Rural Index increased by 0.7% points from 14.3% in May to 15.1% in June.