Nigeria’s inflation trends further down to 11.14% y/y in July

Nigeria’s inflation continued its downward trend in July as headline consumer price index fell to 11.4 percent in July, the 18^th consecutive month of deceleration, according to the National Bureau of Statistics (NBS) data released Wednesday.

Specifically, headline inflation contracted to 11.14 percent year-on-year (y/y) in July from 11.23 percent y/y in June.

The statistical agency noted that the percentage change in the average composite CPI for the twelve months period ending July 2018 over the average of the CPI for the previous twelve months period was 13.95 percent, showing 0.42 percent point from 14.37 percent recorded in June 2018.

According to the NBS, urban inflation rate eased by 11.66 percent (year-on-year) in July 2018 from 11.68 percent recorded in June 2018, while the rural inflation rate remained flat at 10.83 percent in July 2018 from 10.83 percent in June 2018.

Furthermore, on a month-on-month basis, the urban index rose by 1.23 percent in July 2018, down by 0.01 from 1.24 percent recorded in June, while the rural index also rose by 1.18 percent in July 2018, down by 0.05 percent from the rate recorded in June 2018 (1.23) percent.

The corresponding twelve-month year-on-year average percentage change for the urban index is 14.33 percent in July 2018. This is more less 14.71 percent reported in June 2018, while the corresponding rural inflation rate in July 2018 is 13.64 percent compared to 14.08 percent recorded in June 2018.

Also, the NBS said the composite food index eased to 12.85 percent in July 2018 compared with 12.98 percent in June 2018. This represents the tenth consecutive decline in year on year food inflation since September 2017.

This rise in the food index was caused by increases in prices of Potatoes, yam and other tubers, vegetables, bread and cereals, fish, oils and fat and fruits.

On month-on-month basis, the food sub-index increased by 1.40 percent in July 2018, down by 0.17 percent points from 1.57 percent recorded in June. This represents the first-time month on month food inflation has declined since February 2018.

The average annual rate of change of the Food sub-index for the twelve-month period ending July 2018 over the previous twelve-month average was 17.10 percent, 0.65 percent points from the average annual rate of change recorded in June (17.75) percent.

Core inflation was 10.2 percent y/y during the review period, vs. 10.4 percent in June.

The highest increases were reported in the prices of medical services, carpets and other floor coverings, vehicle spare parts, domestic services and household services, pharmaceutical products, paramedical services, hairdressing saloons and personal grooming establishment, dental services, motor cars and fuels and lubricants for personal transport equipment.

On a month-month basis, the core index increased at a slower pace of 0.81 percent, 22 basis points below the 1.03 percent reported in June.