The season when the Consumer Price Index (CPI) defiles measures put in place by the Central Bank of Nigeria (CBN) is here again. With the seasonal rise in the prices of rice and other commodities, inflation is set to rise marginally for the month of November.
Experts said it could rise further by the end of December.
An analysis of the average prices of a basket of consumer goods that FSDH Research monitored across the country in November shows that the prices of some major components of the food basket increased.
The average prices of rice increased by about 11.35 percent because of the seasonal effects of the increased demand in the anticipation of the Christmas season. There was an increase of about 6.67 percent in the price of garri, as well as increases of 7.34 percent, 6.67 percent, 15.80 percent, 3.33 percent and 7.41 percent in the prices of tomato, yam, Irish potato, palm oil and meat respectively.
However, the average price of beans dropped by about 8.33 percent, while other prices monitored remained unchanged during the period. The movement in the prices of food items in November resulted in a 0.90 percent increase in our Food and Non-Alcoholic Index to 152.66 points. We also noticed an increase in the prices of Housing, Water, Electricity, Gas and Other Fuels, Health and Transportation between October and November.
Our model indicates that the price movement in the consumer goods in November would increase the Consumer Price Index (CPI) to 151.07 points, representing a month-on-month increase of 0.69 percent. The increase in the CPI in November will produce an inflation rate (year-on-year) of 7.9 percent, representing a basis point increase from October 2013. Looking ahead, the inflation rate for the month of December 2013 may likely be higher than the November 2013 number.
Analysis of the foreign exchange rate indicates that the value of the naira appreciated marginally by 0.05 percent, against the U.S. Dollar in the month of November 2013, compared with the 0.03 percent depreciation recorded in October 2013. Consequently, the marginal appreciation in the value of the Naira in November 2013 coupled with the general stability in global food prices moderated the impact of imported inflation in the economy between the two months under review.