Inflation in Nigeria rose to 24.08% in July, 2023 beating existing inflation record in the country in the last 10 years.
The National Bureau of Statistics (NBS) in it’s CPI report released for July 2023, today, stated that inflation rate shot up from 22.79% in June to 24.08% in July 2023.
Inflation increased to 24.08% YoY in July 2023 representing 1.29% higher than 22.79% recorded in June 2023. Food inflation inched up by 26.98% YoY in July 2023; 1.73% higher than 25.25% recorded in June 2023, while core inflation printed at 20.47% YoY in July 2023; 0.41% higher than 20.06% recorded in June 2023.
Inflation schema maintained an upward slope into H2 2023. July’s inflation numbers printed significantly higher than its preceding month, aided by both Food and Core inflation. The causes for the persistent increase in food prices are no news, given that no known measures have been effectively executed to mitigate the ongoing insecurity and displacement issues in the North. The Northern Green Harvest with its anticipated food distribution, also already hindered by high transportation costs, faced other impediments like floodings due to the ongoing rainy season. Meanwhile, imported food costs continue to accelerate with FX rates at cN788/$ at the I&E FX window – now Nigerian Foreign Exchange Market (NFEM), and cN870/$ in the Parallel Market as of July 2023.
Likewise, Core inflation continues to play its hand in the uptick of headline inflation. The 2nd increase in pump prices to N568/ltr was unanticipated. Further tightening the necks of citizens still adjusting to the initial price hike.
Analysts at Comercio Partners Research noted that symmetrically, fuel consumption declined to 46.3 million litres per day for July 2023, against 66.6 million litres per day in May 2023 prior to the subsidy removal. This translates to lower demand for fuel, depicting reduced movement of individuals and food items.
Despite the anticipated operations of local refineries and the President’s 500,000 hectares farmland plan, our inflation expectations for the ensuing months remain dreary. Factors like further flood fears in Southern Nigeria, speculative price hikes in pump prices, continued depreciation of the Naira and sustained dependency on imports impel our expectations.
