Nigeria CPI and Inflation Report for October

October 2022 CPI and inflation report show a significant rise of the headline inflation rate in the consumer prices on a year–on–year basis to a new 17-year high of 21.09%, a 0.32% points increase from 20.77% recorded in September.  This was 5.09% points higher when compared to the rate recorded in October 2021, which was 15.99%. This shows that the general price level of the headline inflation rate increased in October 2022 when compared to the same month in the preceding year.

On a month-on-month basis, the Headline inflation rate for October 2022 was 1.24%, this was 0.11% lower than the rate recorded in September 2022 (1.36%). This means that in October 2022 the general price level of the headline inflation rate (month–on–month basis) declined by 0.11%. The percentage change in the average CPI for the twelve months ending October 2022. The average CPI for the previous twelve-month period was 17.86%, showing a 0.91% increase compared to the 16.96% recorded in October 2021.

Breakdown Of The Report

Core inflation Report

The core inflation rose to 17.76% in the month in review, showing a 0.16% point increase from the 17.6% recorded in the previous month.  While on a month-on-month basis, it was 0.93% in October and 1.59 % in September. The highest increases were recorded in prices of Gas, Liquid fuel, Passenger transport by Air, Solid fuel, and vehicle spare parts. The average 12-month annual inflation rate was 15.31% for the twelve months ending October 2022, 2.59% points higher than the 12.73% recorded in October 2021.

Food Inflation Report

Food inflation also surged to 23.72% in the review month from 23.34% in the previous month. This showed a 0.38% higher than last month’s 23.34% rate recorded and 5.38% higher compared to the 18.34% recorded in October of 2021. The rise in the price of food could be attributed to the increases in prices of Bread and cereals, Food products, Potatoes, yams and other tubers, and oil and fat.  The average annual rate of food inflation for the twelve months ending October 2022 stood at 19.83%, which is 0.92% points lower compared to the average yearly rate of change recorded in October 2021 (20.75%).

Download the detailed NBS report here

Possible Cause Of Surge

The National Bureau of Statistics report suggests that the possible underlying factors responsible for the increase in the year-on-year index may not be far from the disruptions experienced in the supply of food products, increase in the cost of importation as a result of the persistent Naira depreciation, and the general increase in the price of production which includes an increase in energy cost and cost of borrowing.

It is a well-known fact that Nigerians have been grappling with many things, including the high costs of goods and services occasioned by the surge in energy prices and persistent but systematic Naira devaluation in the country. Nigeria’s inflation rate hit a new record high, touching a 17-year ceiling of 21.09% indicative of a further decline in the purchasing power of an average Nigerian.

The high cost of borrowing has made it so difficult for meaningful production in the country. The Central Bank of Nigeria in 2022 alone has raised interest rates by a cumulative 450 basis points all in a bid to tame the rising cost of items, while also developing policies to mop up excess liquidity from the system.  The inflation rate has continued to surge even as experts have predicted a high rate in November and December due to the high demands and pressure that come with the Christmas festivities.

On The Global Scene

Last week the US Labor Department reported that its consumer-price index increased 7.7% in October from the same month a year ago, but was down from 8.2% in September and 9.1% in June’s rate. The core CPI, which excludes volatile energy and food prices climbed 6.3% in October from a year earlier, but down from 6.6% in September, which was the biggest increase since August 1982. Details 

The IMF predicts higher Inflation and uncertainty in the world economy in the world economic outlook for October 2022.  In a report titled “Inflation and Uncertainty,” the IMF says that global economic activity has continued to experience a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook. Global growth is forecast to slow from 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023. This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic.

Global inflation is forecast to rise from 4.7% in 2021 to 8.8% in 2022 but to decline to 6.5% in 2023 and to 4.1% by 2024. Monetary policy should stay the course to restore price stability, and fiscal policy should aim to alleviate the cost-of-living pressures while maintaining a sufficiently tight stance aligned with monetary policy. Structural reforms can further support the fight against inflation by improving productivity and easing supply constraints. At the same time, multilateral cooperation is necessary for fast-tracking the green energy transition and preventing fragmentation.

Visit the IMP website for the detailed report – imf.org

Also, Check Previous Reports:

Consumer Price Index And Inflation Report For September 2022

Why Nigerian Food Crisis May Worsen As Inflation soar To Nears Two-decade High At 20.52% In August 2022

Inflation And Uncertainty Hits Harder As IMF Warns Of Global Economic Growth Contraction In 2023