Latest Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS) shows that the country’s inflation rate has increased to 17.71 percent in May, 2022, from 16.82% recorded in April 2022, indicating a 1.78% increase.
The apex statistical agency for the country in its May 2022 CPI Report said, the inflation rate increased to 17.71 percent on a year-on-year basis.
This is 0.22 percent points lower compared to the rate recorded in May 2021, which is (17.93) percent.
This means that the headline inflation rate slowed down in the month of May when compared to the same month in the previous year (i.e. the year 2021).
The Bureau said, increases were recorded in all COICOP divisions that yielded the Headline index.
On a month-on-month basis, it said, the Headline inflation rate increased to 1.78 percent in May 2022, this is also 0.02 percent rate higher than the rate recorded in April 2022 (1.76) percent.
The percentage change in the average composite CPI for the twelve months period ending May 2022 over the average of the CPI for the previous twelve months period is 16.45 percent, showing a 0.95 percent increase compare to the 15.50 percent recorded in May 2021.
The urban inflation rate increased to 18.24 percent (year-on-year); this is a 0.27 percent decline compared to 18.51 percent recorded in May 2021.
On a month-on-month basis, the urban inflation rate rose to 1.81 percent in May 2022, this is a 0.03 percent increase compared to April 2022 (1.78).
The corresponding twelve-month average percentage change for the urban index is 17.00 percent in May 2022. This is 0.91 percent higher compared to 16.09 percent reported in May 2021.
The rural inflation rate increased to 17.21 percent in May 2022 (year-on-year) basis; this is a 0.15 percent decline compared to 17.36 recorded in May 2021.
On a month-on-month basis, the rural index rose to 1.76 percent in May 2022, up by 0.02 percent from the rate recorded in April 2022 (1.74), while the corresponding twelve-month average percentage change for the rural inflation rate in May 2022 is 15.91 percent. This is 0.97 percent higher compared to 14.94 percent recorded in May 2021.
The implications simply is that it would reduce the purchasing power of the naira, increases the expenditure of Nigerians, and puts more pressure on savings.
Additionally, it would lower consumption since the naira value can not afford to buy much quantity given that wages and salaries are constant.
Reacting to the report, an Economist, Ezekiel Agbo, said, “now if I buy goods worth 1000 naira last week and this week it has increased to 1,171 we say that inflation rate is 17.1%. Same thing translates to every other goods and services at different prices.
“This is not healthy. You know most goods are composite, meaning that the increase in one can translate to an increase in the other.
“Say for instance petrol, when fuel increases, prices of goods and services also increase due to cost of transportation”.
Recall, last month, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) raised the benchmark interest rate to 13 percent from the previous rate of 11.5 percent.
The hike which was the highest in more than two years was meant to bring to heel the rising inflation.
The committee felt that tightening would help rein in inflation before it assumes a galloping trend.
It noted that the current rise in inflation may be inimical to growth, and thus hinder the full recovery of the economy.
Unfortunately, the MPC’s decision could not stop the inflation from rising, as the rate reaches rooftop at 17.71 percent in the latest report.