Nigeria’s headline inflation rose to 22.22% in the Month of April 2023

May 15, 2023 BusinessTrumpet

The Nigeria bureau of statistics (NBS) has released the April 2023 inflation report which shows the following data:
Headline rate 22.22% y/y (22.04% March);
Core rate 20.14% y/y (19.86%); and
Food rate 24.61% y/y (24.45%).
In April, headline inflation climbed by 14 basis points (bps) year on year to 22.22%.
Month on month, headline inflation jumped to 1.91% from 1.86% in the previous month. The m/m increase can be attributed in part to a minor increase in demand during the Easter and Eid al-Fitr holidays.
Food inflation (24.61%) increased by +16 basis points over the previous month. Oil and fat costs rose the most, followed by bread, cereals, potatoes, yams and other tubers, fish, fruits, meat, vegetables, and spirits.
Imported food price inflation climbed by +7bps year on year to 18.65% y/y, up from 18.58% y/y in the previous month.
Core inflation grew by +28 basis points to 20.14% year on year, up from 19.86% year on year in the previous month. Gas, passenger air transport, liquid fuel, lubricants for personal transport equipment, vehicle replacement parts, fuels and lubricants for personal transport equipment, medical services, and passenger road transport all experienced inflationary pressure.
Housing water, electricity, gas, and other fuels climbed by 16.93% year on year and 1.26% month on month. The transportation segment increased by 23.12% year on year and 2.23% month on month. These increases in the transportation sector can be ascribed in part to intermittent PMS scarcity within the month as well as higher pricing for deregulated items like diesel, kerosene, and aviation fuel.
According to the NBS headline inflation rate by state, Bayelsa had the highest (26.14% y/y). Meanwhile, Borno had the lowest (19.06% year on year) in April ’23. It is important to note that household baskets change among states due to differences in consumption trends.
Inflation is still being driven mostly by structural concerns such as instability, poor logistics and energy supplies, elevated commodity costs, and exchange rate pressure, among others. To combat growing inflation, the CBN/MPC increased the policy rate by 150 basis points to 18% in 2023.
The MPC’s next meeting is set for May 22 and 23. At best, we anticipate a hold posture or a +25bps rate hike.
To read the full report, click here

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