January 17, 2023/CSL Research
Contrary to popular expectation, the headline Inflation number for December 2022 moderated to 21.34%, 12bps lower than 21.47% recorded in November 2022. Month-onmonth, headline inflation retained its year end upbeat, up 32bps to 1.71% in December from 1.39% in November and 1.24% in October 2022. The numbers were largely driven by the impact of yuletide spending amid disruption in local food supply (caused by widespread insecurity and flooding), imported inflation (triggered by disruption in global supply chain),
and local currency depreciation. The moderation in headline inflation was driven by 37bps decline in food inflation.
Food inflation, though, still high, slowed to 23.75% in December from 24.13% in November 2022. On a month-on-month basis, the food basket grew higher by 1.89% compared to 1.40% in November and 1.23% in October.
According to the Nigerian Bureau of Statistics (NBS), the increase was attributed to increase in prices of some food items like oil and fat, fish, potatoes & tubers, bread & cereals, and fruits etc. The FAO Food Price Index (FFPI) averaged 132.4 points in December 2022, down 2.6 points (1.9%) from November, marking the ninth consecutive monthly decline and 1.3 points (1.0%) below its value a year ago.
The decline in the index in December was driven by a steep drop in the international prices of vegetable oils, alongside declines in cereal and meat prices, but partially counterbalanced by moderate increases in those of sugar and dairy.
On the other hand, core inflation rose by 25bps to 18.49% in December from 18.24% in November. Month-on-month, the core basket grew slower by 1.33% in December from 1.67% recorded in November and 0.93% in October.
The highest increases were recorded in prices of Gas, Liquid fuel, Passenger transport by Air, Vehicles spare parts, Fuels and lubricants for personal transport equipment, Solid fuel etc. Looking ahead, we expect. We expect headline inflation to moderate slightly, largely due to base effect particularly from the Month of February 2022.
Click here to read full PDF copy of report
