Food inflation slows down on government intervention

Data released by the National Bureau of Statistics (NBS) shows that, government intervention in recent past has reduced rate of rise of food inflation as general inflation rose to a new high of 33.2 per cent in March.

Analysts at Afrinvest said, “looking at the component members of the headline reading, we noted that the food inflation rate ascended to 40.0 per cent year-on-year (y/y) (February: 37.9 per cent). On a month -on-month (m/m) basis, the food inflation sub-index printed at 3.6 per cent, reflecting a slower growth of 0.2ppts compared to the rate recorded in the prior month (3.8 per cent). 

“We linked the modest decline in the m/m food print to a combination of interventions at different levels of government (e.g, FG dolled out 42,000MT of grains across the federation while some states such as Lagos, subsidised the price of selected food items in major markets by about 25.0 per cent)”.

Likewise, the core inflation sub-component nudged higher by 6.3ppts to 25.9 per cent y/y. On a m/m basis, the core inflation rate printed at 2.5 per cent, up 0.4ppts from 2.2 per cent in the prior month. This was driven by price increases in bus fares, rentals, medical fees, and pharmaceutical products.

According to recent data from the NBS, Nigeria’s headline inflation rate nudged higher to 33.2 per cent y/y in March 2024 from 31.7 per cent y/y in the previous month. Compared to the same period in 2023, the headline index print represents an 11.2ppts increase in the general price level in the last twelve months (LTM) – a more than four-fold growth when compared to real output expansion in the economy (Real GDP grew by 2.7 per cent in the LTM).

The NBS attributed the rise in the inflation was driven by increase in food and beverage together with energy and cost of housing.

Year-on-year, the headline inflation rate grew by 11.16 percentage points compared to March 2023, registering at 22.04 per cent,  indicating a notable acceleration in price levels over the past year.

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