Nigeria’s inflation report for the month of May 2023
The NBS released the May inflation report for Nigeria which reveals –
Headline rate 22.41% y/y (22.22% April);
Core rate 20.06% y/y (20.14%); and
Food rate 24.82% y/y (24.61%).
compared to the prior month, May’s headline inflation climbed by 19 basis points to 22.41% y/y. Headline inflation climbed month over month to 1.94% from 1.91% in the prior month.
Inflation in the food sector (24.82%) increased by +21bps from the previous month. Prices for oil and fat, bread, cereals, potatoes, yams, and other tubers, fish, fruits, meat, vegetables, and spirits all saw significant price hikes.
Inflation of imported food prices on a year-over-year basis rose by +7bps to 18.72% y/y from 18.65% y/y in the previous month.
Core inflation rose by +8bps to 20.06% y/y in the most recent month from the 20.14% y/y figure in the previous one. Gas, air passenger transportation, liquid fuel, lubricants for personal transportation equipment, vehicle spare parts, fuels and lubricants for personal transportation equipment, medical services, and passenger transportation by road were all affected by inflation.
The housing segment’s growth was 16.86% year over year and 1.35% month over month. Additionally, the transport sector saw growth of 23.87% y/y and 2.18% m/m. The occasional PMS shortages during the month and the elevated costs of deregulated goods like diesel, kerosene, and aviation fuel can be partly blamed for these hikes in the transport sector.
Ondo has the highest headline inflation rate (25.84% y/y) according to the NBS data broken down by state. The lowest rate was recorded by Plateau in May of 23 (19.89% y/y). It is important to note that household baskets differ amongst states as a result of diverse consumption habits
Structure-related problems including insecurity, inadequate logistics and energy supply, high commodity costs, and pressure on currency rates, among others, continue to be the main causes of inflation. In May 2023, the CBN/MPC increased the policy rate by 50 basis points to 18.5%.
Future increases in headline inflation are anticipated as a result of the recent elimination of PMS subsidies and the opening of the foreign exchange market. SOURCE: Coronation Merchant Bank
