The ‘Consumer Price Index (CPI) Report for June’ released by the National Bureau of Statistics (NBS) on Friday indicates that Nigeria’s inflation rate has dropped by 0.81%, moving from 17.93% recorded in May 2021 to 17.75% in June 2021 which represents the third consecutive decline in Headline Index. According to the NBS “The CPI measures the average change over time in prices of goods and services consumed by people for day-to-day living. The construction of the CPI combines economic theory, sampling and other statistical techniques using data from other surveys to produce a weighted measure of average price changes in the Nigerian economy.”
The report indicates that the food inflation stood at 21.83% in June 2021 compared to 22.28% in May 2021 while core inflation which excludes the prices of volatile agricultural produce dropped from 13.15% recorded in May 2021 to 13.09% in the review period. There was also an increase in the urban inflation rate as it jumped by 18.35 %(year-on-year) in June 2021 from May 2021’s 18.51%. On the other hand, the rural inflation rate moved by 17.16% in June 2021 from 17.36% in May 2021.
The decline in the rate of increase in CPI indicates that the inflation rate in Nigeria might have peaked and is on its way downward. Although, it is still worth noting that an inflation rate of 17.75% is still way higher than the 11.02% recorded before the closure of land borders in 2019.
Also, global food prices are rising at their fastest rate in a decade, and this can be seen with the increases in prices of bread, cereals, yam, and other consumables. The United Nations’ Food and Agriculture Organization (FAO) is worried that soaring prices could foment further social unrest in countries already mired in political turmoil and vulnerable nations as they struggle with the fallout from the COVID-19 pandemic.