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Headline Inflation Increases by 21.34% YoY in December 2022 as Food Inflation Rises by 23.75%

All Items Index

In December 2022, the headline inflation rate eased to 21.34% compared to November 2022 headline inflation rate which was 21.47%. Looking at the trend, December 2022 inflation rate showed a decline of 0.13% when compared to November 2022 inflation rate. However, on a year-on-year basis, the headline inflation rate was 5.72% points higher compared to the rate recorded in December 2021, which was (15.63%). This shows that the headline inflation rate increased in the month of December 2022 when compared to the same month in the preceding year (i.e., December 2021). 

On a month-on-month basis, the percentage change in the All Items Index in December 2022 was 1.71%, which was 0.32% higher than the rate recorded in November 2022 (1.39%). This means that in the month of December 2022, the general price level was 0.32% higher relative to November 2022. 

The percentage change in the average CPI for the twelve months ending December 2022 over the average of the CPI for the previous twelve months period was 18.85%, showing 1.89% increase compared to the 16.95% recorded in December 2021. 

The increases were recorded in all COICOP divisions that yielded the Headline index most especially in Food & Non-Alcoholic Beverages, Transport and Miscellaneous Goods & Services. 

LIKELY FACTORS RESPONSIBLE FOR THE INCREASE IN THE MONTHLY INFLATION RATE (Month-on-month basis). Basically, the likely factors responsible to increase in inflation rate in month-on-month can be attributed to the sharp increase in demand usually experience during the festive season, increase in the cost of production e.g. increase in energy cost, transportation cost, exchange rate depreciation etc. 

Urban Inflation 

On a year-on-year basis, in the month of December 2022, the urban inflation rate was 22.01%, this was 5.85% higher compared to the 16.17% recorded in December 2021. On a month-on-month basis, the urban inflation rate was 1.80% in December 2022, this was 0.31% higher compared to November 2022 (1.50%). The corresponding twelve-month average for the urban inflation rate was 19.38% in December 2022. This was 1.86% higher compared to the 17.52% reported in December 2021. 

Rural Inflation 

The rural inflation rate in December 2022 was 20.72% on a year-on-year basis; this was 5.61% higher compared to the 15.11% recorded in December 2021. On a month-on-month basis, the rural inflation rate in December 2022 was 1.63%, up by 0.33% compared to November 2022 (1.30%). The corresponding twelve-months average for the rural inflation rate in December 2022 was 18.34%. This was 1.94% higher compared to the 16.40% recorded in December 2021.

Food Index

The food inflation rate in December 2022 was 23.75% on a year-on-year basis; which was 6.38% higher compared to the rate recorded in December 2021 (17.37%). The rise in the food inflation was caused by increases in prices of Bread and cereals, Oil and fat, Potatoes, Yam and other tubers, Fish, Food Product n.e.c,. 

On a month-on-month basis, the food inflation rate in December was 1.89%, this was 0.49% higher compared to the rate recorded in November 2022 (1.40%). This increase was attributed to increase in prices of some food items like Oil and fat, Fish, Potatoes & Tubers, Bread & Cereals, and Fruits etc. 

The average annual rate of food inflation for the twelve-months ending December 2022 over the previous twelve-month average was 20.94%, which was 0.53% points increase from the average annual rate of change recorded in December 2021 (20.40%).

All Items Less Farm Produce

The ‘’All items less farm produce’’ or Core inflation, which excludes the prices of volatile agricultural produce stood at 18.49% in December 2022 on a year-on-year basis; up by 4.62% when compared to the 13.87% recorded in December 2021. 

On a month-on-month basis, the core inflation rate was 1.33% in December 2022. It stood at 1.67% in November 2022, down by 0.34%. 

The highest increases were recorded in prices of Gas, Liquid fuel, Passenger transport by Air, Vehicles spare parts, Fuels and lubricants for personal transport equipment, Solid fuel etc. 

The average twelve-months annual inflation rate was 16.08% for the twelve-months ending December 2022; this was 2.91% points higher than the 13.16% recorded in December 2021.

State Profiles

In analysing price movements under this section, it should be noted that CPI is weighted by consumption expenditure patterns which differ across states and locations. Accordingly, the weight assigned to a particular food or non-food item may differ from state to state making interstate comparisons of consumption basket inadvisable and potentially misleading. 

All Items Inflation 

In December 2022, all items inflation rate on a year-on-year basis was highest in Bauchi (23.79%), Kogi (23.35%), Anambra (23.13%), while Taraba (18.98%), Osun (19.09%) and Kwara (19.18%) recorded the slowest rise in headline year-on-year inflation. On a month-on-month basis, however, December 2022 recorded the highest increases in Oyo (3.48%), Abuja (3.05%), Sokoto (2.58%), while Ebonyi (0.11%), Ekiti (0.68%) and Nasarawa (0.70%) recorded the slowest rise on month-on-month inflation. 

Food Inflation 

In December 2022, food inflation on a year-on-year basis was highest in Kwara (27.90%), Imo (26.94%) and Ebonyi (26.28%), while Sokoto (20.90%), Taraba (21.59%) and Cross River (21.71%) recorded the slowest rise in year-on-year food inflation. On a month-on-month basis, however, December 2022 food inflation was highest in Sokoto (3.38%), Oyo (3.10%) and Kaduna (2.97%), while Nasarawa (0.06%), Osun (0.70%) and Kogi (0.76%) recorded the slowest rise on month-on-month inflation.

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