It is no news that Headline Inflation have maintained an upward trend, owing to underlying factors that affect the economy. The Headline Inflation recorded a seventh consecutive rise to 12.26% in March,2020. This is an increase of 0.06 percent points from 12.20% recorded in the previous month. Interstate wise, the highest rise was seen in Bauchi State at 15.55% (YoY) whereas Kwara State with a rise to 9.94% (YoY) recorded the slowest rise amongst states in Nigeria.
This sub sequential increase is also mirrored in the Core and Food inflation at 9.73% (9.43%: Feb’2020) and 14.98% (14.90%: Feb’2020) Year on Year, respectively.
Recall, The CPI which measures inflation, measures the average change over time in prices of goods and services consumed by people for day-to-day living. Weighting of these items occurs to capture the importance of selected commodities in the entire index.
The rise by 0.08 percent points(YoY) to 14.98% in the Food Inflation was due to increase in prices of items such as Bread , Cereals , Fish, Potatoes, Yam and other tubers, Oils and fats, Vegetables and Fruits Increament’ . On Month on Month basis, Food Inflation rose marginally by 0.07 percent points to 0.94% in March, 2020. The highest rise however, was recorded in Sokoto State at 16.81% (YoY) whereas Lagos State with a rise to 13.06% (YoY) recorded the slowest rise amongst states.
The “All items less farm produce” which is known as Core Inflation stood at 9.73%, up 0.30 percent points compared with 9.43% recorded in the previous month. The highest rise in prices were recorded in Passenger transport by air, Tobacco, Household textiles, Major household appliances, Domestic services and household services, Pharmaceutical products, Maintenance and repair of personal transport equipment, Water Supply and Catering services.
The Lock down across in various states like Abuja, Lagos and Ogun States and other major disruptions in the normal economic activity of several States due to COVID-19 will take effect in April 2020 CPI and inflation report and would not have a major impact for March 2020 Inflation report.
CBP Research is of the opinion that the latter (Lock down and disruptions due to COVID-19) will lead to SLIGHT RISE in the inflation rate for next next month- April, for the Domestic and Global Economy. As most economies around the world are taking safe measures to control the spread of the Corona Virus in their economies. The World Health Organization, International Monetary Fund and other sister organizations are also making efforts and taking reasonable measures by providing medical support, funds and debts relief to reduce its grievous impact on Mankind and the world economy