Contrary to expectations the Consumer Price Index (CPI) which measures inflation, increased by 18.55 percent (year-on-year) in December 2016, 0.07 percentage points higher from the 18.48 per cent recorded in November. This is an 11-year high record corresponding with the rate as at November 2005.
Again, contrary to expectation of Yuletide driven- transportation cost, the report released yesterday by the National Bureau of Statistics, NBS, indicated that increases were driven by price surges in housing, utilities and the food index.
According to NBS, Communication and Restaurants and Hotels group recorded the slowest pace of price growth in December, growing at 5.33 percent and 8.91 percent (year-on-year) respectively.
Conversely, the Food Index rose by 17.39 percent (year-on-year) in December 2016, up by 0.20 percent points from rate recorded in November (17.19) percent. NBS stated: “During the month, all major food sub-indexes increased, with Soft Drinks recording the slowest pace of increase at 7.66 percent (year on year).
“Price movements recorded by All-Items-less-farm-produce or Core sub-index, rose by 18.10 percent (year-on-year) in December, down by 0.10 percent points from rate recorded in November (18.20) percent.
“During the month, the highest increases were seen in Housing, Water, Electricity, Gas and Other Fuels, Clothing and Footwear and Education, growing at 27.27, 21.62 and 17.84 percent respectively.
“On a month-on-month basis, the Headline index rose by 1.06 percent point in December, higher from the rate recorded in November (0.78) percent.
“The Urban index rose by 20.12 percent (year-on-year) in December from 20.07 percent recorded in November, and the Rural index increased by 17.20 percent in December from 17.10 percent in November.
“On month-on-month basis, the urban index rose by 1.08 percent in December from 0.78 percent recorded in November, while the rural index rose by 1.04 percent in December from 0.79 percent in November.
“The percentage change in the average composite CPI for the twelve-month period ending in December 2016 was 15.7 percent, higher from the 15.0 percent recorded in November 2016. The corresponding twelve-month year-on-year average percentage change for the urban index increased from 16.19 percent in November to 17.05 percent in December, while the corresponding rural index also increased from 13.90 percent in November to 14.54 percent in December.”
Ahead of the December 2016 inflation report, economists at Financial Derivatives Company, FDC, run by Nigeria’s leading economist, Bismark Rewane, have pointed to a decline in inflation figures both for December 2016 and January 2017. They had stated: “Increasing consumer resistance, changing preference and declining income is taking its toll on retail prices in January. This coincides with FDC Think Tank’s forecast of a slight dip in December inflation to 18.3%.”
According to them, “Rice and beans have shed over 20% in two weeks. We expect further declines as consumers switch to paying school fees from shopping malls.”