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Currency depreciation, energy cost drives inflation in October

The Nation’s inflation has risen to 21.09% in October 2022, on a year–on–year basis, according to figures released by the National Bureau Statistics in its monthly consumer price index, CPI report.

This was 5.09% points higher compared to 15.99% in October 2021.

On a month-on-month basis, the Headline inflation rate for the month under review was 1.24%, this was 0.11% lower than the rate recorded in September 2022 (1.36%).

The report indicates that for over the past three months, there has been a decline in headline inflation on a month-on-month basis due to the present harvesting season.

It however attributes the increase in annual inflation rate to disruption in the supply of food products, increase in cost of importation due to the persistent currency depreciation, general increase in the cost of production such as increase in energy cost.

Food and Core inflation

The food inflation rate in the month was 23.72% on a year-on-year basis; which was 5.39% higher compared to the rate recorded in October 2021 (18.34%).

The rise in food inflation was caused by increases in prices of Bread and cereals, Food products sch as Potatoes, yams and other tubers, oil and fat.

On a month-on-month basis, the food inflation rate in the month under review was 1.23%, this was a 0.21% decline compared to the rate recorded in September 2022 (1.43%). This decline was attributed to the reduction in prices of some food items like Tubers, Palm oil, Maize, Beans, and Vegetables

Core inflation, which excludes the prices of volatile agricultural produce stood at 17.76% in October 2022 on a year-on-year basis; up by 4.52% when compared to 13.24% recorded in October 2021.

On a month-on-month basis, the core inflation rate was 0.93% in October 2022. It was 1.59
% in September 2022.

According to the NBS, the highest increases were recorded in prices of gas, liquid fuel, passenger transport by air, solid fuel, and vehicles spare parts.

Urban and Rural inflation

Urban Inflation for the month of October on a year-on-year basis was put at 21.63%, indicating a 5.11% increase compared to the 16.52% recorded in October 2021.

On a month-on-month basis, the urban inflation rate dropped to 1.33% in October 2022, this was a 0.12% decline compared to September 2022 (1.46%).

The Rural Inflation rate in October 2022 was 20.57% on a year-on-year basis; this was 5.09% higher compared to the 15.48% recorded in October 2021.

On a month-on-month basis, the rural inflation rate in October 2022 was 1.16%, which was down by 0.11% compared to September 2022 (1.27%).

Writing by Annabel Nwachukwu