Headline rate 22.22% y/y (22.04% March);
Core rate 20.14% y/y (19.86%); and
Food rate 24.61% y/y (24.45%).  

May 15. 2023/Coronation Research

• April headline inflation increased by +14bps (when compared with the previous month) to 22.22% y/y.
• On a month-on-month basis, headline inflation increased to 1.91% from 1.86% recorded in the previous month. The m/m increase can be partly attributed to modest demand boost during the Easter and Ed al-Fitr festivities.
• The food inflation (24.61%) recorded an increase of +16bps when compared with the previous month. The highest increases were recorded in the prices of oil and fat, bread, cereals, potatoes, yams and other tubers, fish, fruits, meat, vegetables, and spirits.
• On a y/y basis, imported food price inflation increased by +7bps to 18.65% y/y from 18.58% y/y recorded in the previous month.
• Core inflation increased by +28bps to 20.14% y/y from 19.86% y/y recorded in the previous month. Inflationary pressure was felt across gas, passenger transport by air, liquid fuel, lubricants for personal transport equipment, vehicle spare parts, fuels and lubricants for personal transport equipment, medical services, as well as passenger transport by road.
• The housing water, electricity, gas and other fuel segment increased by 16.93% y/y and 1.26% m/m. The transport segment also recorded an increase of 23.12% y/y and 2.23% m/m. These increases in the transport segment can be partly attributed to sporadic PMS scarcity within the month and elevated prices for deregulated products such as diesel, kerosene, and aviation fuel.
• Based on the NBS headline inflation by state, Bayelsa recorded the highest (26.14% y/y). Meanwhile, Borno recorded the lowest (19.06% y/y) in April ‘23. It is worth noting that household baskets vary across states due to different consumption patterns.
• Inflation continues to be largely driven by structural issues such as insecurity, poor logistics, and energy supply, elevated commodity prices, and exchange rate pressure, among others. To tame rising inflation, the CBN/MPC has hiked the policy rate by +150bps to 18% in 2023.
• The MPC is scheduled to hold its next meeting on 22 and 23 May ‘23. We expect a hold stance or +25bps rate hike at best.

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