The Consumer Price Index (CPI) measuring inflation in the Nigerian economy has risen to its highest point of 16.5 per cent since 2005 this is according to the report released by the National Bureau of Statistics (NBS).
The report reads: “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%).
“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.”
The report added that, “The Core sub-index has increased at a faster pace for five consecutive months. Over the first six months of the year, the Core sub-index increased by 12.8%, up 5.2% points from rates recorded in the corresponding period in 2015.”
The present rate of inflation would add pressure on policy makers to increase borrowing costs.
The International Monetary Fund 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.
The Central Bank of Nigeria, which kept its benchmark rate at 12 percent in May, will announce its next policy decision on July 26.