In spite of the Christmas and New Year’s celebrations, Nigeria’s inflation rate unexpectedly decreased to 21.34% YoY in December 2022, down from the 21.47% reported in November, according to the National Bureau of Statistics’ (NBS) most recent data on inflation. In November 2022, the rate fell by 0.12%, reflecting a 5.72% gain over the previous year’s rate of 15.63%.
Subsequently, food inflation slowed to 23.75% in December 2022, down from 24.13% the previous month. Meanwhile, as compared to the same period in 2021, the rate jumped by 6.38% points to 17.37%. The increase in food inflation was driven by price rises in bread and cereals, oil and fat, potatoes, yam and other tubers, fish, and other food products, according to the NBS.
The average annual rate of rise in food prices for the twelve months ending December 2022 was 20.94%, which is 0.53% higher than the average annual rate of change reported in December 2021 (20.40%).
In December 2022, the “All items less farm produce” index, or Core inflation, which eliminates volatile agricultural product prices, stood at 18.49%. This is a 24.8 basis point increase above the 18.24% observed in November 2022. In December 2022, the core inflation rate was 1.33% month on month. It was 1.67% in November 2022, a 0.34% decrease.
The most significant price increases were observed for gas, liquid fuel, air travel for passengers, vehicle replacement parts, fuels and lubricants for personal transport equipment, and solid fuel.
For the twelve months ending December 2022, the average annual inflation rate was 16.08%, 2.91% more than the 13.16% reported in December 2021. Thinking ahead to January’s inflation, we expect the global economic downturn, further increases in food and energy prices, and other factors to further exacerbate the inflation rate but at a slower pace than the prior months.