By Samuel Bankole
For the second consecutive month, Nigeria’s consumer inflation rate declined to 17.93 percent in May 2021 from 18.12 percent in the previous month, according to the latest data published by the National Bureau of Statistics (NBS) on Tuesday.
The 0.19 percent points declined in inflation in May was the second consecutive month the consumer price index will fall, having fallen to 18.12 percent last month from 18.17 percent previously.
“The composite food index rose by 22.28 percent in May 2021 compared to 22.72 percent in April 2021,” the NBS report stated.
The government data agency said the “rise in the food index was caused by increases in prices of Bread, Cereals, Milk, Cheese, Eggs, Fish, Soft drinks, Coffee, Tea and Cocoa, Fruits, Meat, Oils and fats and Vegetables.”
“All items less farm produce which excludes the prices of volatile agricultural produce stood at 13.15 percent in May 2021, up by 0.41 percent when compared with 12.74 percent recorded in April 2021.
“The highest increases were recorded in prices of Pharmaceutical products, Garments, Shoes and other footwear, Hairdressing salons and personal grooming establishments, Furniture and furnishing, Carpet and other floor covering.
“Others include, Motor cars, Hospital services, Fuels and lubricants for personal transport equipment, Cleaning, repair and hire of clothing, Other services in respect of personal transport equipment, Gas, Household textile, and Non-durable household goods,” the report showed.
In May 2021, all items inflation on year on year basis was highest in Kogi (25.13 percent), Bauchi (23.02 percent) and Sokoto (20.11 percent), while Katsina (15.69 percent), Imo (15.52 percent) and Delta (14.85 percent) recorded the slowest rise in headline Year on Year inflation.
On month on month basis, however, May 2021 all items inflation was highest in Kogi (2.22 percent), Ogun (2.17 percent) and Cross River (2.07 percent), while Ekiti (0.02 percent) recorded the slowest rise in headline month on month with River and Sokoto recording price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate).
In its economic bulletin for June, the Financial Derivatives Company, wholly owned by renowned economist, Bismack Rewane had projected higher headline inflation in May.
“Our time series model and market survey show that headline inflation is likely to increase again to 18.2 percent in the month of May from 18.12 percent in April.
“The news of a marginal decline in April inflation was received with a certain amount of skepticism by analysts. This is because anecdotal proxies seemed to be running contrary to the data.
“Since we do not doubt the integrity of the NBS, the question on the minds of most analysts is if the drop was a blip or a trend,” the company economists wrote in the report.