With the rate at which prices of goods and services rise up for the second consecutive month, analysts are concerned over inflationary pressures creeping back into the economy.
Inflation which measures price increases had risen by 0.03 percentage points from 11.37 per cent which it was in April to 11.40 percent in May according
to latest data from the National Bureau of Statistics (NBS).
The Central Bank of Nigeria (CBN) had left its benchmark interest rate steady at 13.5 per cent at its last meeting in May following a surprise 0.5 percentage point cut at the previous meeting.
Analysts believe seasonal factors and recent implementation of the minimum wage may have also played a role in rising inflation. Commenting on the rising inflation, Research analyst at FXTM, Lukman Otunuga said “should consumer prices continue to accelerate in the coming months, this could force the CBN to maintain status quo on interest rate.”
He noted that “while the timing of a rate cut remains uncertain, there is still a possibility of the CBN surprising markets near the end of 2019 if domestic conditions stabilize, inflation is able to moderate back towards the six to nine per cent target and the Fed cuts interest rates.’’
On month-on-month basis, the Headline index increased by 1.11 percent in May 2019. This is 0.17 percent rate higher than the 0.94 per cent rate recorded in April 2019. Having dropped to 11.25 per cent in March, Consumer Price Index began trending upwards in April.
The percentage change in the average composite CPI for the twelve months period ending May 2019, over the average of the CPI for the previous twelve months period was 11.30 percent, 0.01 percent points from 11.31 percent recorded in April 2019.
The urban inflation rate increased by 11.76 percent (year-on-year) in May 2019 from 11.70 percent recorded in April 2019, while the rural inflation rate increased by 11.07 percent in May 2019 from 11.08 percent in April 2019.
On a month-on-month basis, the urban index rose by 1.15 percent in May 2019, up by 0.15 points from 1.00 percent recorded in April 2019, while the rural index also rose by 1.07 percent in May 2019, up by 0.17 from the rate recorded in April 2019 (0.90 percent).
The corresponding 12 month year-on-year average percentage change for the urban index was 11.66 percent in May 2019. This is less than the 11.69 percent reported in April 2019, while the corresponding rural inflation rate in May 2019 is 10.99 percent compared to 11.00 percent recorded in April 2019.
The composite food index rose by 13.79 percent in May 2019 compared to 13.70 percent in April 2019. This rise in the food index was caused by increases in prices of meat, oils and fats,
bread and cereals, potatoes, yam and other tubers, Fish, Milk, cheese and egg, and vegetables.
On month-on-month basis, the food sub-index increased by 1.41 percent in May 2019, up by 0.27 percent points from 1.14 percent recorded in April 2019.
The average annual rate of change of the Food sub-index for the twelve-month period ending May 2019 over the previous twelve-month average was 13.37 percent, 0.03 percent points from the average annual rate of change recorded in April 2019 (13.34 per cent).