Accordingly, disinflation continued in August 2019 despite several pronouncements regarding restrictions on the import of some food items, minimum wage and the recent border closures.
It is important to note that with respect to the latter, the border was only closed 20 August 2019 with only 11 days of 31days for any significant impact to be felt either way on prices. The inflation rate is also the average prices for the whole month and not only the price of goods and services in the last few days of the month. Furthermore, the harvest season and existing weak consumer demand and their natural effect to slow down food and other prices will also play a major role in determining the direction of inflation.
Against this backdrop, in August 2019, all major indices slowed except urban inflation year on year.
On a month-on-month basis, the Headline index increased by 0.99 percent in August 2019. This is 0.02 percent rate lower than the rate recorded in July 2019 (1.01) percent.
The consumer price index, (CPI) which measures inflation increased by 11.02 percent (year-on-year) in August 2019. This is 0.06 percent points lower than the rate recorded in July 2019 (11.08) percent.
The percentage change in the average composite CPI for the twelve months period ending August 2019 over the average of the CPI for the previous twelve months period was 11.271 percent, showing 0.02 percent point from 11.291 percent recorded in July 2019.
The urban inflation rate increased by 11.48 percent (year-on-year) in August 2019 from 11.43 percent recorded in July 2019, while the rural inflation rate increased by 10.61 percent in August 2019 from 10.64 percent in July 2019.
On a month-on-month basis, the urban index rose by 1.04 percent in August 2019, down by 0.03 from 1.07 percent recorded in July 2019, while the rural index also rose by 0.93 percent in August 2019, down by 0.03 from the rate recorded in July 2019 (0.96) percent.
The corresponding twelve-month year-on-year average percentage change for the urban index is 11.62 percent in August 2019. This is less than 11.64 percent reported in July 2019, while the corresponding rural inflation rate in August 2019 is 10.95 percent compared to 10.97 percent recorded in July 2019.
The composite food index rose by 13.17 percent in August 2019 compared to 13.39 percent in July 2019.
This rise in the food index was caused by increases in prices of Oils and fats, Meat, Bread and cereals, Potatoes, yam and other tubers and Fish
On a month-on-month basis, the food sub-index increased by 1.22 percent in August 2019, down by 0.04 percent points from 1.26 percent recorded in July 2019.
The average annual rate of change of the Food sub-index for the twelve-month period ending August 2019 over the previous twelve-month average was 13.458 percent, 0.002 percent points from the average annual rate of change recorded in July 2019 (13.460) percent.
All Items Less Farm Produce
Given the continuous stability in the exchange rates, the “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 8.68 percent in August 2019, down by 0.12 percent when compared with 8.80 percent recorded in July 2019.
On a month-on-month basis, the core sub-index increased by 0.67 percent in August 2019. This was down by 0.1 percent when compared with 0.77 percent recorded in July 2019.
The highest increases were recorded in prices of Cleaning, Repair and hire of clothing, Repair of household appliances, Hospital services, Glassware, tableware and household utensils, Passenger transport by air and repair and hire of footwear.
The average 12-month annual rate of change of the index was 9.41 percent for the twelve-month period ending August 2019; this is 0.11 percent points lower than 9.52 percent recorded in July 2019.
In analysing price movements under this section, note that the CPI is weighted by consumption expenditure patterns which differ across states. Accordingly, the weight assigned to a particular food or non-food item may differ from state to state making interstate comparisons of consumption basket inadvisable and potentially misleading.
All Items Inflation
In August 2019, all items inflation on year on year basis was highest in Kebbi (14.97%), Kano (13.24%) and Bauchi (13.00%), while Cross River (8.97%), Delta (8.63%) and Kwara (8.32%) recorded the slowest rise in headline Year on Year inflation.
On month on month basis however, August 2019 all items inflation was highest in Ebonyi (1.59%),Bayelsa (1.59%) and Ogun (1.52%), while Niger (0.29%), Kwara (0.28) recorded the slowest rise with Kogi recording price deflation or negative inflation (general decrease in the general price level of goods and services or a negative inflation rate).
In August 2019, food inflation on a year on year basis was highest in Kebbi (17.20%), Kano (16.08%) and Adamawa (15.95%), while Bayelsa (10.22%), Katsina (9.64%) and Kogi (8.97%) recorded the slowest rise.
On month on month basis, however, August 2019 food inflation was highest in Akwa Ibom (2.56%), Enugu (2.37%) and Ogun (2.17%), while Kogi (0.09%), Benue (0.05%) and Delta (0.03%) recorded the slowest rise.