The National Bureau of Statistics (NBS)’s inflation numbers for December which came in at 15.75% much higher than the 14.89% recorded in November reflects a historical trend in which inflation rate is elevated during this month owing to the demand pressure associated with the yuletide period.
This was disclosed by Uche Uwaleke, a financial Economist and Professor of capital market at the Nasarawa State University.
Prof. Uwaleke noted that the inflation rate for December 2020 in particular was excercebated by the lingering effects of border closure, increase in VAT, electricity tariffs and the pump price of fuel. Insecurity may have also accounted for why the food inflation was highest in a State like Edo.
He said, the rate of increase in Urban inflation gives cause for worry. This, he said may not be unconnected with the rise in rural-urban migration.
He added that “given that food inflation remains the major challenge, I expect the inflation rate to moderate this year following the intensification of CBN’s interventions in Agriculture and improvements in forex supply, the implementation of the 2021 Agriculture budget and transport infrastructure, border reopening as well as improvements in Security.
“It’s important that the relevant agencies of government plans ahead to tackle flooding issues detrimental to the farming season,” he said.