The National Bureau of Statistics reveals that in June, Nigeria’s inflation rate soared to 16.5 percent, the highest rate in almost 11 years.
According to data on the Central Bank of Nigeria’s website, from 15.6 percent in May to 16.5 percent in June 2016, Africa’s largest economy recorded the highest inflation rate since October 2005. This means that prices rose 1.7 percent in the month.
The NBS said in June, the Consumer Price Index (CPI), which measures inflation, continued to record relatively strong increases for the fifth consecutive month. The Headline index increased by 16.5% (year-on-year), 0.9% points higher from rates recorded in May (15.6%).
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Most COICOP divisions which contribute to the headline index increased at a faster pace, the increase was however weighed upon by a slower increase in three divisions; Recreation & Culture, Restaurant & Hotels, and Miscellaneous Goods & Services Year on year, energy prices, imported items and related products continue to be persistent drivers of the core sub-index. The Core index increased by 16.2% in June, up by approximately 1.2% points from rates recorded in May (15.1%).
During the month, the highest increases were seen in the electricity, liquid Fuel (kerosene), furniture and furnishings, passenger transport by road, fuels and lubricants for personal transport equipment.
Asides farm produce, the core sub-index increased by 16.2% in June (year-on-year), up approximately by 1.2% points from 15.1% recorded in May.
The Core sub-index has increased at a faster pace for five consecutive months. Over the first six months of the year, the Core subindex increased by 12.8%, up 5.2% points from rates recorded in the corresponding period in 2015.
Inflation has increased consistently since October 2015, with the change in exchange rate policy, in the latter part of June expected to weigh in on inflation for the month of July.
The International Monetary Fund, IMF said this month, Nigeria’s economy could contract for the first time in more than two decades this year as a fall in oil revenue and electricity shortages weigh on output.
Gross domestic product contracted by 0.4 percent in the three months through March as the naira peg and restrictions on trading foreign currency led to a shortage of dollars needed to import fuel and materials for manufacturers.