Inflation rate, the average rate of change in the prices of goods and services climbed to a near 17-year high in July, fueled by bread, cereal, gas and transport costs, said the National Bureau of Statistics (NBS).
Inflation rose to 19.64 per cent in July, compared to 18.6 per cent recorded in the previous month of June 2022.
The last time Nigeria’s inflation was above 19.64 per cent was in September 2005 when it rose to 24.32 per cent, according to Nairalytics, a web portal that publishes Nigeria’s historical macroeconomic data. Notably, the uptick in the inflation rate was driven by increases in the food and core index.
The closely watched indicator rose to its highest level in 14 months, standing at 22.02 per cent in July 2022, representing a 1.42 per cent-point increase compared to 20.6% recorded in the previous month. On a month-on-month basis, the food inflation rate in July stood at 2.04 per cent, this is 0.01 per cent lower than 2.05 per cent recorded in the previous month.
According to the NBS, the rise in food inflation was caused by increases in prices of bread and cereals, food products, potatoes, yam and other tubers, meat, fish, oil, and fat.
On a month-on-month basis, the core inflation rate was 1.75 per cent in July 2022. This was up by 0.20 per cent when compared to 1.56 per cent recorded in June 2022.
Notably, the highest increases were recorded in prices of Gas, Liquid fuel, Solid fuel, Passenger transport by road, Passenger transport by Air, Garments, Cleaning, Repair and Hire of clothing.
Akwa Ibom State recorded the highest inflation rate in the month under review with 22.88 per cent, closely followed by Ebonyi State with 22.51 per cent. Others include Kogi (22.08 per cent), Bayelsa (21.6 per cent), and Rivers State (21.37 per cent).
Reacting to the July CPI report by the National Bureau of Statistics (NBS), Professor of the Capital Market at the Nasarawa State University, Uche Uwaleke said the increase in inflation rate was expected especially with rising global inflation.
The increase in headline inflation for the month of July was expected against the backdrop of rising inflation globally on account of supply chain disruptions from the Russian Ukrainian conflict.
This outcome buttresses the argument that the monetary approach to tackling cost-push inflation does not lie in a hike in the Monetary Policy Rate.