After monthly consecutive drop since January, the Consumer Price Index (CPI), which measures inflation rose to 11.37 per cent year-on-year in April compared to 11.25 per cent in March, according to the National Bureau of Statistics (NBS).
Inflation had resumed its descent in January when it dropped to 11.37 per cent from 11.44 per cent in December in 2018.
The headline index further reduced to 11.31 per cent in February and 11.25 per cent in March before resorting to the upward trajectory in April.
According to the latest report by NBS, food inflation stood at 13.70 per cent in April from 13.45 per cent in the preceding month.
The CPI figures for April, which was released by the NBS yesterday, showed that core inflation stood at 9.30 per cent in the month under review compared to 9.50 per cent in March.
The report indicated that the 0.12 per cent increase in inflation was as a result of increases recorded in all the key parameters, which determine the headline index for the month under review.
While the urban inflation rate increased to 11.70 per cent in April from 11.54 per cent in March, the rural index also rose to 11.08 per cent from 10.99 per cent in the preceding month.
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According to the NBS, month-on-month, the urban index rose by 1.00 per cent, up by 0.19 from 0.81 per cent in March while rural inflation also rose by 0.90 per cent in April, up by 0.13 from the 0.77 per cent recorded in March.
Notably, inflation resumed its descent in January 2019 when it dropped to 11.37 per cent from 11.44 per cent in December in 2018.
The headline index further reduced to 11.31 per cent in February and 11.25 per cent in March before resorting to the upward trajectory in April.
The rebound in the headline index will be a major source of worry to the Central Bank of Nigeria (CBN), which had been labouring to keep inflation rate at single digit, so as to contain the rising prices and stabilise the exchange rate.
One of the major concerns around high inflation had been its benign effect on both monetary and fiscal policies as well as the economy in general.
The consecutive monthly drop in inflation in previous months had allowed for a rare opportunity for the CBN to tinker with the monetary policy rate (interest rate) which was reduced by 50 basis points recently to the excitement of the markets.
The adjustment in MPR finally came after holding the rate at 14 per cent for about two years, largely due to inflation as the former rate cannot go below the latter rate.
There had been increasing expectations that the declining rate of inflation could possibly lead to further slash in MPR by the monetary authorities but the latest rebound could spell otherwise.
The sudden upward trajectory in the headline index beat analysts’ forecasts, some of whom had predicted that going by the liquidity management system and other related conditions, including the fact that elections are over, the rate may continue to decline.
Meanwhile, the NBS stated that April inflation rate increase was largely attributed to increases in the prices of meat, fish, oils and fat, bread and cereals, milk, cheese and egg, potatoes, yam and other tubers, fruits and vegetables.
However, core inflation, which excludes the prices of agricultural produce rose as a result of increases in prices of medical services, hospital services, dental services, actual and imputed rentals for housing, cleaning, repair and hire of clothing, tobacco, vehicle spare parts, major household appliances and garments.
Source: BIZWATCH
Samson Oyedeyi
