Home Economy Nigeria’s inflation rate surges to 22.41% in May 2023

Nigeria’s inflation rate surges to 22.41% in May 2023

by Business News Report

National Bureau of Statistics NBS, has said that Nigeria’s inflation rate rose to 22.41 per cent in May 2023, marking the fifth consecutive increase. Despite monetary policies to control inflation, it remains at an over 17-year high. Food prices increased by 24.82 per cent in May 2023, with notable rises in oil/fat, yam, bread/cereals, fish, and vegetables. Core inflation stood at 20.06 per cent in May 2023, driven by higher gas prices, air transport costs, and medical services. It said Nigeria’s inflation rate elevated further in May 2023, rising to 22.41% from 22.22% recorded in the previous month, which represents the fifth consecutive increase in the headline inflation rate. 

This is according to the recently released Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS). The inflation rate in Nigeria rose for the fifth time in a row in May, after the rate declined to 21.34% in May 2022. Inflation continues to rage at an over 17-year high despite contractionary monetary policies by the Central Bank of Nigeria (CBN). On a month-on-month basis, the headline inflation rate in May 2023 was 1.94%, which was 0.03% higher than the rate recorded in April 2023 (1.91%). This means that in May 2023, on average, the general price level was 0.03% higher relative to April 2023. Food and non-alcoholic beverages (11.61%) contributed the most to the rise in the inflationary pressure, followed by housing water, electricity, gas and other fuel (3.75%), and clothing and footwear (1.71%). The Food inflation rate rose to 24.82% in May 2023, representing a 0.21% point increase from 24.61% recorded in the previous month and 5.3% points higher than 19.5% recorded in the corresponding period of 2022.

On a month-on-month basis, the Food inflation rate in May 2023 was 2.19%, this was 0.06% higher compared to the rate recorded in April 2023 (2.13%). The average annual rate of Food inflation for the twelve-months ending May 2023 over the previous twelvemonth average was 23.65%, The rise in food inflation on a year-on-year basis was caused by increases in prices of Oil and fat, Yam and other tubers, Bread and cereals, Fish, Potatoes, Fruits, Meat, Vegetable, and Spirits. The “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 20.06% in May 2023 on a year-on-year basis; up by 5.16% when compared to the 14.90% recorded in May 2022. On a month-on-month basis, the Core inflation rate was 1.81% in May 2023. It stood at 1.46% in April 2023, up by 0.35%.

The average twelve-month annual inflation rate was 18.33% for the twelve months ending May 2023. The highest increases were recorded in gas prices, passenger transport by air, Liquid fuel, vehicle spare parts, fuels and lubricants for personal transport equipment, medical services, and passenger transport by road. Nigeria’s inflation rate continues to increase further on the back of the surge in energy and food prices, coupled with the cash crunch experienced in the first quarter as a result of the new Naira redesign by the CBN.

The rate has remained high despite measures by the monetary authorities to clamp down on inflation by increasing interest rates to as high as 18.5% in May 2023. Meanwhile, inflation is expected to continue its upward trend through the year, following the announcement of the removal of petrol subsidies and the adjustment of the FX rate at the official market.

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