CPI: Headline inflation rate increased by 2.27 percent points between July 2021 to July 2022- NBS

Oru Leonard

The Consumer Price Index (CPI), is a macroeconomic indicator that provides a general measure of change in the average prices of goods and services commonly purchased by consumers relative to a base period. It is a core macroeconomic indicator used in the derivation of the inflation rate for policy, planning, and monitoring of an economy.

The Headline inflation for July 2022 was 19.64 percent on a year-on-year basis. This was higher by 2.27 percent points compared to the rate recorded in July 2021, which was 17.38%. This implies that the headline inflation rate increased in July 2022 when compared to the same month in the previous year (i.e., July 2021). Increases were recorded in all COICOP divisions that yielded the Headline index.

The increase in inflation was caused by an increase in food index attributed to the disruption in the supply of food products; an increase in the cost of transportation arising from the higher cost of energy, an increase in import costs due to currency depreciation; as well as a general increase in the cost of production.

On a month-on-month basis, the Headline inflation rate was 1.817% percent in July 2022, higher than the rate recorded in June 2022 reported at 1.816 percent. The percentage change in the average composite CPI for the twelve months ending July 2022 over the average of the CPI for the previous twelve months period was 16.75 percent, showing an increase compared to 16.30 percent recorded in July 2021.

The composite food index on a year-on-year basis was 22.02 percent in July 2022, showing a rise compared to 21.03 percent in July 2021. The rise in the food index was caused by increases in prices of Bread and cereals, Food products n.e.c, Potatoes, yam, and other tubers, Meat, Fish, Oil, and fat. On a month-on-month basis, the food sub-index in July 2022 was 2.04 percent, lower than the 2.05 percent recorded in June 2022.

The index for all items less farm produce (Core inflation), which excludes the prices of volatile agricultural produce stood at 16.26 percent in July 2022 on a year-on-year basis, this was higher when compared to 13.72 percent recorded in July 2021.

On a month-on-month basis, the core sub-index was 1.75 percent in July 2022, higher when compared to 1.56 percent recorded in June 2022. The highest increases were recorded in prices of Gas, Liquid fuel, Solid fuel, Passenger transport by road, Passenger transport by Air, Garments, Cleaning, Repair and Hire of clothing.

Looking at the urban and rural distribution of the Consumer Price Index, the index for urban inflation rate on a year-on-year was 20.09 percent in July 2022. This was higher compared to 18.01 percent reported in July 2021. On a month-on-month basis, the urban inflation rate was 1.8209 percent in July 2022, a decrease compared to June 2022 with 1.8211 percent. The rural inflation was 19.22 percent in July 2022 on a year-on-year basis, higher compared to the 16.75 percent recorded in July 2021. On a month-on-month basis, the rural rate was 1.811 percent in July 2022, also higher than 1.809 percent in June 2022.

All Items Inflation for the states in July 2022 on a year-on-year basis was highest in Akwa Ibom with 22.88%, followed by Ebonyi with 22.51%, and Kogi with 22.08%, while the slowest rise was recorded in Jigawa with 16.62%, followed by Kaduna with 17.04% and Borno with 18.04%. On a month-on-month basis, July 2022 recorded the highest increase in Adamawa with 2.87%, followed by Abuja with 2.84%, and Oyo with 2.77%, while Bauchi recorded the slowest rise on month-on-month inflation with 0.82%, followed by Kano with 0.83% and Niger with 1.03%. Food Sub-index Inflation for the states in July 2022 on a year-on-year basis was highest in Kwara with 29.28%, followed by Akwa Ibom with 27.22%, and Kogi with 26.08%, while Kaduna recorded the slowest rise on year-on-year food inflation with 17.16%, followed by Jigawa with 17.46% and Anambra with 19.25%. On a month-on-month basis, the food inflation sub-index was highest in Kwara with 3.90%, followed by Delta with 3.61%, and Benue with 2.94%, while Taraba, Gombe, and Niger recorded the slowest rise on month-on-month inflation with 0.14%, 0.94%, and 1.13%.