Yuletide spending pushed inflation up to 11.98% – NBS

The Consumer Price Index,  which, measures inflation, increased to 11.98 per cent year-on-year in December 2019, latest inflation report released on Friday by the National Bureau of Statistics has revealed.

The 11.98 per cent inflation rate, according to the NBS, is 0.13 percentage points higher than the 11.85 per cent recorded in November 2019.

On a month-on-month basis, the NBS said the index increased by 0.85 per cent in December, adding that this was 0.17 percentage points lower than the 1.02 per cent recorded in November.

The report said the urban inflation rate rose by 12.62 per cent year-on-year in December 2019 from 12.47 per cent recorded in November.

The rural inflation rate, on the hand, increased by 11.41 per cent in December  from 11.30 per cent in November.

On a month-on-month basis, it said the urban index rose by 0.90 per cent in December, representing a decline by 0.17 percentage points from the 1.07 percent recorded in November.

The report stated that the rural index also rose by 0.82 percent in December, down by 0.16 from the 0.98 per cent recorded in November.

The report said food inflation rose by 14.67 per cent in December compared to 14.48 per cent in November.

“This rise in the food index was caused by increases in prices of bread and cereals, meat, fish, oils and fats, potatoes, yam and other tubers,” it added.

On a month-on-month basis, it said the food sub-index increased by 0.97 per cent in December, down by 0.28 percentage points from 1.25 per cent recorded in November.

Experts said that the border closure as well as the yuletide spending of last month may have led to the increase in inflation.

A professor of economics at the Olabisi Onabanjo University Ago-Iwoye, Ogun State, Sheriffdeen Tella, told our correspondent in a telephone interview that while border closure had spiked inflation, prices would adjust to their original state.

He said, “You will recall that the border was closed by the government and that action would affect the price of other commodities. If you look at the data that were released, the increase would likely be from food items followed by manufactured goods.

“So it is that increase in price due to border closure that made other prices to also rise.”

Also speaking, the Registrar, Chartered Institute of Finance and Control of Nigeria, Godwin Echoi, said while the closure of the border was good for the economy as it would stimulate demand, increase in price in the short term was one of the consequences of such action.

He said that the latest inflation data from the NBS were reflective of both the border closure and consumer spending during the festive period.
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