According to the recently released consumer price index report by the National Bureau of Statistics (NBS), Nigeria’s inflation rate increased to 22.79% in June 2023. This represents a 0.38% points rise from the previous month’s rate of 22.41%.
Comparing the year-on-year basis, the headline inflation rate was 4.19% points higher than the rate recorded in June 2022, which was 18.60%. This indicates a significant increase in the inflation rate compared to the same month of the previous year.
The major contributors to inflation at the divisional level were food and non-alcoholic beverages, accounting for 11.81%. This was followed by housing water, electricity, gas, and other fuel at 3.81%. The item with the least contribution to inflation was communication at 0.15%.
The rise in inflation was primarily driven by the food index, as food inflation accelerated to 25.25% in June 2023, up from 24.82% in May 2023. On a month-on-month basis, food inflation increased by 2.40%, which is 0.21% points higher than the rate recorded in the previous month.
The increase in food inflation on a year-on-year basis was mainly due to higher prices of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetables, milk, cheese, and eggs.
Core inflation, which excludes volatile food prices, also increased to 20.27% in June 2023 from 20.06% in the previous month. This rise in the core index was influenced by the removal of petrol subsidies by the federal government, resulting in a significant increase in the price of petrol from an average of N185/ltr to N500 per litre.
On a month-on-month basis, the core inflation rate in June 2023 was 1.74%, slightly lower than the rate of 1.81% recorded in May 2023. The highest increases were observed in prices of passenger transport by air, gas, vehicle spare parts, liquid fuel, fuels, lubricants for personal transport equipment, medical services, and passenger transport by road, among others.