Inflation Rate Slows to 8%

Nigerian inflation rate, the average change in the prices of goods and services has declined by 20 basis points from 8.2 percent to 8 percent by the end of September.
Composite Price Index (CPI), which measures the average change in price level   or inflation rate dropped further in September to 8.0 percent year-on-year, 0.2 percentage points from 8.2 percent recorded in percent recorded in August, according to the CPI/Inflation Report of the month released by the Statistician General of the Federation, Yemi Kale, in Abuja.
He said the decline in the Headline Index when compared with the level of the preceding month was largely as a result of a slower rate of increase in food prices as the recent harvest season continues to constrain rising food prices.
The report stated further that after trending lower in the first half of the year (from 11.3 percent in January to 5.5 percent in June), the core sub-index again trended upwards for the third consecutive month, adding however the rate of increase was however tempered by moderations in the “Housing Water, Electricity, Gas and Other fuels” division as well as the “Furnishings, Household Equipment and Household Maintenance” division.
In the month under review, NBS reported that the Headline index increased by 0.75 percent month on month, an increase of 0.5 percentage points from 0.25 percent recorded in August, indicating the first uptick in the CPI on a monthly basis in four months.
A further analysis of the CPI trend indicated that the Urban composite CPI was recorded at 147.9 points in September, indicating an 8.0 percent increase from levels recorded in September 2012 but 0.4 percentage points lower than the 8.4 percent recorded in August this year.
The Bureau stated that the percentage change in the average Composite CPI for the twelve-month period ending in September 2013 over the average of the CPI for the previous 12-month period was recorded at 9.5 percent, lower than the average twelve month rate of change of 9.8 percent recorded in August.
It also reported that the corresponding 12-month year-on-year average percentage change for the Urban index was 10.4 percent, while the corresponding Rural index was recorded at 8.8 percent.
A further analysis of the Food Index, showed that in the month under review, the rate of increase in food prices moderated for the second consecutive month as produce from the on- going harvest continues to put downward pressure on the Food Sub-index with the 9.4 percent rate recorded in September representing 0.3 percentage points lower than 9.7 percent recorded in August.
On a month-on-month basis however, the Food sub-index was reported to have increased by 0.9 percent in September, up from 0.5 percent recorded in August by 0.4 percentage points and that the highest price increases were recorded in the oils and fats, and Bread and Cereals classes, amongst others.
The report said  the average annual rate of rise of the Food sub-index for the twelve-month period ending in September 2013 was 10.1 percent when compared with the same period in 2012. This was marginally lower than the 12 month average year-on-year change for the period ending in August (10.2 percent)
The statistical agency stated also that  “All items less Farm Produce” or Core index, which excludes the prices of volatile agricultural products, increased for the second consecutive month in August to 7.2 percent, up by 0.6 percentage points from the 6.6 percent recorded in July.
A further decomposition of the Core sub index of the “All items less Farm Produce” or Core index on a month-on-month basis, showed that it increased for the third consecutive month in September to 7.4 per cent, up by 0.2 percentage points from 7.2 percent recorded in August compared to the month-on-month basis which showed that the Core sub index was recorded at 0.6 per cent, lower than 1.3 percent recorded in August by 0.7 percentage points.
The Bureau pointed out that the increase in the core sub-index was as a result of price increases across various class items particularly, Actual and Imputed rental prices, books and stationeries as a result of the start of the new school year, and accommodation services amongst others.  The average 12 month annual rate of rise of the index was recorded at 8.9 percent in September 2013, down 0.5 percentage points from 9.4 per cent recorded in August 2013.

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