Friday, September 16

Inflation rises to 17.6% in August, says NBS

Inflation rises to 17.6% in August, says NBS

Annual inflation in Nigeria accelerated to 17.6 per cent in August from 17.1 per cent in July, according to the National Bureau of Statistics (NBS).

The figure represents a fresh 11-year high and the seventh monthly increase in a row, as the crisis in the economy deepens.

The rise from 17.1 per cent in July reflected higher prices for electricity, gas, transport and food, a separate index for which rose to 16.4 per cent from July’s 15.8 per cent, it said.

“During the month, the highest increases were seen in solid fuels, vehicles parts, books and stationeries and clothing,” the NBS said in a statement.

The NBS said: “In August the Consumer Price Index (CPI) which measures inflation increased by 17.6% (year-on-year), 0.5% points higher from the rate recorded in July (17.1%).

“Increases were recorded in all COICOP (Classification of Individual Consumption by Purpose) divisions which contribute to the Headline index reflecting higher prices across the board.

“The major divisions responsible for accelerating the pace of the increase in the headline index were Housing, Water, Electricity, Gas and Other Fuel, Education and Transportation Services,” the report stated.

According to the NBS, the trend of rising inflation is clearly discernible in both urban and rural areas of Nigeria even though the pace slowed down a bit between July and August this year.

“Urban and Rural Prices continued to rise in the month of August.

“The Urban index increased by 19.3 percent (year-on-year) in August from 18.9 percent recorded in July, while the Rural index increased by 16.1 percent in August from 15.5 percent in July.

“On a month-on-month basis, both Urban and Rural index increased at a slower pace, as Urban index rose by 0.9 percent in August from 1.4 percent in July, while the Rural index rose by 1.09 percent from 1.12 percent in July.

The NBS report particularly notes that the increasing prices of food items and energy aided the rise in inflation.

“Imported Food items as well as other necessary inputs to producing key local staples such as bread continue to drive the food index higher.

“The food index increased by 16.4 percent (year-on-year), 0.6 percent points higher from rates recorded in July.

“The highest price increases were recorded in Meat, Fish, and Bread & Cereals groups.

“On a month-on-month basis, the Food sub-index increased at the same pace for two months at 1.2 percent.

“The average annual rate of change of the Food sub-index for the twelve-month period ending in August 2016 over the previous twelve-month average was 12.7 percent, 0.5 percent points from the average annual rate of change recorded in July (12.2 percent).

The economy slid into recession for the first time in more than 20 years, largely due to the impact of low oil prices.

Crude oil sales account for 70 per cent of government revenue.

These problems have been exacerbated by a spate of attacks since the start of the year that have cut oil production by around 700,000 bpd from 2.1 million barrels per day (bpd) at the start of the year.

Inflation is expected to slow next year, however, and economists polled by Reuters predict the central bank will keep its focus on resuscitating the economy and hold interest rates at 14 percent when policymakers meet next week.

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