Inflation down for a second straight month

The current wave of inflation first hit the price of foodstuff because a lot of the areas that produce in Nigeria, are threatened by Boko Haram.

by Tunji Andrews

In October 2014, the pace of price increases observed by the Consumer Price Index (CPI) which measures inflation eased for the second consecutive month. Prices rose by 8.1 percent (year-on-year), down by 0.2 percentage points from 8.3 percent recorded in September. The weakened pace of price increases recorded by the Headline index in October was as a result of a slower rise in all Classification of Individual Consumption by Purpose (COICOP) divisions that yield the Headline index.

The Food index rose by 9.3 percent (year-on-year) in October, down by 0.4 percentage points from 9.7 percent recorded in September. This is the second consecutive month where advances in food prices have been relatively muted. The ease in the increase in food prices was as a result of slower increases in all groups that contribute to the sub-index.

Price movements recorded by the All Items less Farm Produce or Core sub-index moved at the same pace for the third consecutive month at 6.3 percent (year-on-year), holding for the lowest rate increases recorded this year. While muted price increases were recorded across most divisions and groups that yield the core index, there were increases in Catering Services, Fuels and lubricants for personal transport, and Non-durable household goods.

On a month on month basis, the Headline index rose by 0.51 percent in October, marginally lower from 0.55 recorded in September. Prices increased in most COICOP divisions that yield the headline index prices but eased in the Food and Non-Alcoholic beverages; Housing, Water, Electricity, Gas and other Fuels; Furnishing and Household Equipment; and Education divisions. Year-on-year, the pace of increase of both Urban and Rural prices eased for the second consecutive month in October.

The Urban Composite CPI rose by 8.1 percent, down from 8.4 percent in September, while the Rural Composite CPI rose by 8.0 percent in October, down from 8.2 percent in the previous month. On a month on month basis, Urban prices have increased at the same pace for the previous three consecutive months: by 0.5 percent while the pace of increases in the Rural All-items index eased, increasing by 0.5 percent, down from 0.6 percent in September.

The percentage change in the average composite CPI for the twelve-month period ending in October over the average of the CPI for the previous twelve-month period was recorded at 8.0 percent. The corresponding 12-month year-on-year average percentage change for the Urban index was 8.2 percent in October unchanged from rates recorded in September, while the corresponding Rural index was also unchanged in October increasing by 7.9 percent.

Food index

In October, the pace of increase in food prices eased for the second consecutive month. Prices rose by 9.3%, representing the lowest price increase since March, 2014. The increase of food prices was weighed upon by a slower rise in all groups which yield the sub-index. On a month-on-month basis, food prices increased by 0.5 percent in October, lower from 0.6 percent recorded in September.
This also represents the lowest price increase observed on a month-on-month basis this year. On a month-on-month basis, the highest price increases were recorded in the Coffee, Tea and Cocoa; Fish, Dairy, and Fruit groups. The average annual rate of change of the Food sub-index for the twelve-month period ending in October 2014 over the previous twelve month average was 9.5 percent. The twelve month rate of change has held steady for five months.

All items less farm produce

The pace of increases in the “All items less Farm Produce” or Core index, which excludes the prices of volatile agricultural products held firm for the third consecutive month in September. Prices rose by 6.3 percent (year-on-year).
On a month-on-month basis, prices the pace of price increase has also been constant for a second consecutive month at 0.6 percent. The highest increases were recorded the Education, Catering services, and Repair of household appliances, amongst others.
The average 12 month annual rate of rise of the index was recorded at 7.1 percent for the twelve-month period ending in October 2014, down from the 12 month rate recorded in September which was recorded at 7.2 percent.

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