Prices soar as food inflation tips at 35 percent

By Motolani Oseni

The National Bureau of Statistics (NBS), has said the nation’s inflation rate for January 2024 surged to 29.90 percent. This represents a significant increase from the 28.92 percent recorded in December 2023.

Amidst rising costs of goods and services in the country, the NBS also put food inflation at 35.41 percent compared to 33.93 percent in December last year.

Typically, inflation in the country slowed in January after the spike in year end festivities.

However, data released by the NBS showed that the January 2024 headline inflation rate showed an increase of 0.98 percentage points when compared to the December 2023 headline inflation rate.

Similarly, on a year-on-year basis, the headline inflation rate was 8.08 percentage points higher, compared to the 21.82 percent recorded in January 2023.

The outturn is 40 basis points higher than Bloomberg’s median consensus estimate of 29.50 percent.

READ ALSO: ICPC arraigns ex-ASCSN President over alleged N72…

Food inflation grew stronger in January by 148bps to 35.41 percent year on year. This, according to the NBS, was caused by increase in prices of bread and cereals, potatoes, yam and other tubers, oil and fat, fish, meat, fruit, coffee, tea, and cocoa. On a month-on-month basis, food inflation rate settled at 3.21 percent, relative to the 2.72 percent month on month in December 2023.

In the same vein, the core inflation (all items less farm produce and energy) rose by 50bps to 23.59 percent year on year, compared to December figure of 23.06 percent.

The highest increases were recorded in prices of passenger transport by road, medical services, actual and imputed rentals for housing, pharmaceutical products, accommodation service, and passenger transport by air.

On a monthly basis, the core index settled higher by 40bps to 2.24 percent month on month in January as against 1.82 percent in December.

According to NBS, the corresponding twelve-month average for urban inflation rate as of January 2024 was 27.01 percent, showcasing a 7.10 percent-point jump from the 19.91 percent reported in January 2023.

The data signify a notable elevation in the average price levels within urban locales over a year, underscoring the intensifying inflationary pressures that urban residents are grappling with.

In rural inflation dynamics, the NBS report illuminates that January 2024 witnessed a rural inflation rate of 28.10 percent on a year-on-year basis. This figure marks a 6.97 percentage point ascent from the 21.13 per cent noted in January 2023, signalling a substantial inflationary uptrend in rural locales over the period.

On a month-on-month analysis, the rural inflation rate for January 2024 edged up to 2.57 percent, representing a 0.40 percentage point increase from the 2.17 percent registered in December 2023. This uptick underscores a more rapid inflationary pace in rural areas at the onset of the year.

Furthermore, the twelve-month average rural inflation rate as of January 2024 stood at 23.85 percent, which is 5.01 percentage points higher than the 18.84 percent documented in January 2023.

This statistic reflects a pronounced escalation in the average price levels within rural communities over the year, highlighting the sustained inflationary pressures that increasingly impact the cost of living in these areas.