Nigeria’s annual inflation rate ticked up to 33.95 per cent in May.
However, month-on-month headline inflation slowed to 2.14 per cent in May 2024 from 2.29 per cent in April 2024, the second broad-based decline since October 2023.
According to the National Bureau of Statistics, inflation quickened to 33.95 per cent in May 2024 from 33.69 per cent in April 2024, for the seventeenth consecutive month driven by food and non-alcoholic beverages.
The Financial Derivatives Company, an economic think-tank, had predicted that headline inflation would increase by 0.63 per cent to 34.32 per cent from 33.69 per cent in April.
It stated that the increase in price level combined with other exogenous factors, such as the proposed minimum wage review and increase in the rate of money supply, shows that price inflation is still very potent.
Money supply growth (M3), which declined in March by 10.26 per cent to N92.34 trillion has reversed itself, jumping by 3.98 per cent to N96.97 trillion in April, posing a major threat to the inflation trajectory. Research findings show that every one per cent increase in money supply will lead to a 0.22 per cent increase in headline inflation
The NBS noted that the top five contributors to inflation are food & non-alcoholic beverages 17.59 per cent, housing, water, electricity, gas & other fuel 5.68 per cent, clothing & footwear 2.60 per cent, transport 2.21percent and furnishings & household equipment & maintenance 1.71 per cent.
Food inflation also rose by 15.84 per cent to 40.66 per cent, year-on-year. This was a result of an increase in the rate of the average prices of Potatoes, Yam & Other Tubers, Bread and Cereals, Fish, Meat, Fruit, coffee, tea, and Vegetables according to the report.
