December Inflation Rate Rises To 15.63% Amid Consumer Spending

The December inflation report released on Monday by National Bureau of Statistics (NBS) showed that the eighth consecutive decline in headline

inflation came to a halt, as inflation rate trended upward to 15.63 per cent

in December, from 15.40 per cent recorded in November.

Analysts say this was a suggestive of a

waning high-base effect which had contributed to the declining inflation.

 Faster inflation rates were also printed in both urban and rural areas at 16.17 per cent (from 15.92 per cent) and 15.11 per cent (from 14.89 per cent) respectively in December; driven principally by food inflation.

As the sustained high-base effect waned, the food Index rose at a

faster pace, by 17.37 per cent in December (compared to 17.21 per cent recorded in November) amid stronger y-o-y increases in prices of oils & fats,

bread & cereals, fish, coffee, tea & cocoa, tubers, dairy and egg.

 Also, core inflation rate rose to 13.87 per cent (from 13.85 per cent in November) on the back of higher y-o-y rise in prices of clothing & footwear, Housing water, electricity, gas & other utilities, as well as furnishings & household equipment maintenance.

Meanwhile, imported food index rose by 17.34 per cent (as agaisnt 17.28 per cent

in November) as Naira further depreciated against the greenback at

the interbank window.

 Two months moving average foreign exchange rate at the interbank window rose m-o-m by 5.74 per cent to N430.00/USD in December 2021.

On a month-on-month basis, headline inflation declined in November

to 1.82 per cent (from 1.08 per cent) on sustained sharp increase in prices of food items.

Hence, food inflation rate Jumped to 2.19 per cent from 1.07 per cent.

 On the positive side, core inflation rate fell to 1.12 per cent from 1.26 per cent.