The rate at which price of goods and services rise declined for the fourth month consecutively in May as the Consumer Price Index (CPI) which measures inflation increased by 16.25 per cent.
This is a 0.99 per cent points lower than 17.24 per cent that was recorded in April 2017.
According to the Consumer Price Index for May 2017 released by the National Bureau of Statistics (NBS) yesterday, the prices of food items such as meat, bread and cereals, fish, potatoes, milk cheese and eggs as well as vegetables such as tomatoes continued to record pressure.
On a month-on-month basis, the headline index increased by 1.88 per cent in May 2017, 0.28 per cent points higher than the rate of 1.60 per cent recorded in April 2017.
This indicates the existence of persistence pressure on prices despite the general decline in year on year inflation.
The NBS said month-on-month inflation has cumulatively risen by 7.7 per cent since January 2017.
On a month-on-month basis, the food sub-index increased by 2.54 per cent in May, up by 0.50 per cent points from 2.04 per cent recorded in April.
This represents the highest month-on-month change in food prices since May 2016 and cumulatively represents a rise in the food index of 10.1 per cent since January 2017.
“The food index in May whether on a year-on-year basis on month-on-month basis therefore indicates sustained pressure on food prices since the beginning of the year following high food prices recorded the whole of 2016,” the statistics office said on Thursday.
Price movements recorded by all items less farm produce or Core sub-index rose by 13.00 per cent, year-on-year in May, down by 1.80 per cent points from 14.8 per cent recorded in April.
This represents the seventh straight month of decline in the core index since November 2016.
The urban index rose by 16.34 per cent, year-on-year in May 2017 from 17.62 per cent recorded in April, while the rural index increased by 16.02 per cent in May from 16.69 per cent in April.
On month-on-month basis, the urban index rose by 1.84 per cent in May from 1.61 per cent recorded in April, while the rural index rose by 1.92 per cent in May from 1.59 per cent in April.
Commenting on the latest inflation figures, analyst at FXTM, Lukman Otunuga, noted that the announcement would bolster the growing confidence in the recovery of economy.
“This strong display of price stability may boost investor risk appetite towards the nation and support the Nigerian Stock Exchange which has already climbed to a two-year high.
“Although inflation is cooling, the Central Bank of Nigeria is likely to remain on standby until core economic data shows repeated signs of stability.
“While the nation’s macro fundamentals are slowly healing, the sharp decline in oil prices presents a threat to the current recovery. With oil prices heavily linked to the nation’s foreign external reserves, a drop in the commodity has the ability to reduce dollar supplies, ultimately impacting the stability of the Naira Exchange.
“As the long-term outlook for oil remains tilted to the downside, Nigeria must push ahead with diversifying while breaking away from oil dependence,” he stated.
