The skyrocketing price of goods and
services across the country has reflected in Nigeria’s inflation rate climbing
to a near six-year high of 13.7 percent in April, 2016, 0.9 percentage point
higher than the previous month’s level of 12.8 per cent.
The cost-push inflation is driven
primarily by the severe scarcity of petroleum products which had forced
increases in transportation cost and consequently, arbitrary increases in cost
of all other commodities and services consistently for several months now.
National Bureau of Statistics, NBS, in a report yesterday, said the April
inflation reading, the highest level since August 2010, reflected increases
across all sectors, unlike the previous months which had one or two sectorial
exceptions.
‘‘Lingering structural constraints
continue to manifest spill overs in April as electricity rates, kerosene
prices, the impact of higher PMS (petrol) prices and vehicle spare parts were
the largest contributors to the Core Sub index during the month’’, NBS stated.
These items as well as other imported items, according to NBS, continued to
have ripple effects across many divisions that contribute to the Core Consumer
Price Index. Food index reflected tighter supplies across most groups that
contribute to the sub-index. The sub-index increased by 13.2 per cent in April,
up by 0.4 percentage point from rates recorded in March as all major food
groups which contribute to the Food sub-index increased at a faster pace driven
by higher prices in Fish, Bread/Cereals, and Vegetables groups. Year-on-year,
both the Urban and Rural indices recorded marked increases for the third
consecutive month.
The Urban index rose by 15.1 per
cent, 1.6 percentage points from 13.5 per cent in March, while upward pressure
on prices were relatively less severe in the rural areas as the index increased
12.8 per cent year-on-year, 0.7 percentage point from 12.0 per cent in March.
NBS also stated that increases in imported as well as domestically produced
foods resulted in a higher increase in the Food Sub-index in April, adding that
all groups which contribute to the index increased during the month with the
exception of the Fruit and Potatoes, Yams and Other Tuber groups. The latest
inflation report indicates worsening economic conditions in the country where
gross domestic product, GDP, growth was just 2.8 percent as at last quarter of
2015, its lowest rate since 1999, and speculation of a further decline in the
first quarter and first half 2016 is popular among economy analysts. With the
current inflation rate the Central Bank of Nigeria, CBN, appears to have been
pushed to the wall once again on its benchmark interest rate as the existing
Monetary Policy Rate of 12 per cent
is now grossly negative. The apex bank had shifted the benchmark rate to 12 per
cent from 11 per cent previous month when the inflation rate surpassed it, a
situation which renders interest rates not only negative but a disincentive to
savings. Also the present inflation rate has surpassed the apex bank’s
inflation target maximum of 9.6 per cent by a huge gap of 4.1 percentage
points, thereby complicating the inflation targeting strategy of its monetary
policy measures. With this development many financial analysts would be
expecting the next week’s Monetary Policy Committee, MPC, meeting of the apex bank
to fundamentally overhaul its policy framework. Part of the overhaul would also
include the foreign exchange market structure and possibly the exchange rate
considerations where official devaluation is speculated to be much on the card.
The skyrocketing prices
of goods and services across the country has reflected in Nigeria’s
inflation rate climbing to a near six-year high of 13.7 percent in
April, 2016, 0.9 percentage point higher than the previous month’s level
of 12.8 per cent.
The cost-push inflation is driven primarily by the severe scarcity of
petroleum products which had forced increases in transportation cost and
consequently, arbitrary increases in cost of all other commodities and
services consistently for several months now.
National Bureau of Statistics, NBS, in a report yesterday, said the
April inflation reading, the highest level since August 2010, reflected
increases across all sectors, unlike the previous months which had one
or two sectoral exceptions.
Read more at: http://www.vanguardngr.com/2016/05/inflation-rate-skyrockets-6-year-high/
Read more at: http://www.vanguardngr.com/2016/05/inflation-rate-skyrockets-6-year-high/
The skyrocketing prices
of goods and services across the country has reflected in Nigeria’s
inflation rate climbing to a near six-year high of 13.7 percent in
April, 2016, 0.9 percentage point higher than the previous month’s level
of 12.8 per cent.
The cost-push inflation is driven primarily by the severe scarcity of
petroleum products which had forced increases in transportation cost and
consequently, arbitrary increases in cost of all other commodities and
services consistently for several months now.
National Bureau of Statistics, NBS, in a report yesterday, said the
April inflation reading, the highest level since August 2010, reflected
increases across all sectors, unlike the previous months which had one
or two sectoral exceptions.
Read more at: http://www.vanguardngr.com/2016/05/inflation-rate-skyrockets-6-year-high/
Read more at: http://www.vanguardngr.com/2016/05/inflation-rate-skyrockets-6-year-high/
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