The rise of the cost of food continued unabated in May even as inflation dropped for the fourth consecutive month to 16.25 percent.
Data released by the National Bureau of statistics Thursday showed that the country’s food index increased by 19.27 percent (year-on-year) in May 2017, down by 0.03 percent points from the rate recorded in April (19.30 percent), indicating continued pressure in food prices.
On a month-on-month basis, the Food sub-index increased by 2.54 percent in the review period, up by 0.50 percent points from 2.04 percent recorded in April, representing the highest month-on-month change in food prices since May 2016 and cumulatively representing a rise in the food index of 10.1 percent since January 2017.
More Nigerians have groaned under the burden of high food prices as they have struggled to cope with the cost of basic essentials in the planning season.
The prices of bread and cereal, meat, fish, milk, potatoes, yam and other tubers have all continued to put pressure on the food component of the index but it is expected that this will ease in the harvest season.
This comes two days after the governor of the Central Bank of Nigeria (CBN) Godwin Emefiele announced that the apex bank is targeting an inflation rate of between 10-11 per at the end of 2017. According to the governor of the central bank, although the inflation rate has been trending downwards, it remained remains high.
The current decline in inflation marks the seventh straight decline in the core index since November 2016 and is expected to exert downward pressure on returns on fixed income securities. There is a direct relationship between inflation and fixed income securities a note from FSDH indicates.
A breakdown of the figures shows that the ”All Items less Farm Produce” or Core sub-index, which excludes the prices of volatile agricultural produce eased by 1.80 percent during the month of May to 13.00 percent points from 14.80 percent recorded in April as all key divisions which contributes to the index increased but at a decreasing rate.
On a month-on-month basis, the Core sub-index increased by 1.17 percent in May, 0.07 percent points higher than the 1.10 percent recorded in April. The highest increases in core inflation were recorded in the prices of solid and liquid fuels, garments and clothing materials and other articles of clothing, spirits, motor cars, wine, bicycles, shoes and other footwear, fuels and lubricants for personal transport equipment, motorcycle and air transport.
The average 12-month annual rate of rise of the index was recorded at 16.57 percent for the twelve-month period ending in May 2017, 0.20 percent points lower from the twelve-month rate of change recorded in April.
Price movements recorded by All Items less farm produce or Core sub-index rose by 13.00 percent (year-on-year) in May, down by 1.80 percent points from rate recorded in April (14.80) percent. The Urban index rose by 16.34 percent (year-on-year) in May 2017 from 17.62 percent recorded in April, while the rural index increased by 16.02 percent in May from 16.69 percent in April.
On month-on-month basis, the urban index rose by 1.84 percent in May from 1.61 percent recorded in April, while the rural index rose by 1.92 percent in May from 1.59 percent in April.