According to the National Bureau of Statistics (NBS) Consumer Price Index, CPI, Report for August 2024, food inflation fell to 37.52 per cent in August from 39.53 per cent in July due to a decline in prices of tobacco, tea, cocoa, coffee, groundnut oil, milk, yam, Irish potatoes, water yam, cassava tuber, palm oil and vegetable.
The NBS, yesterday, reported that the headline inflation rate eased by 1.25 percentage points to 32.15 percent in August 2024 from 33.4 per cent in July representing the second consecutive month-on-month decline this year.
NBS said: “In August 2024, the headline inflation rate further eased to 32.15 per cent relative to the July 2024 headline inflation rate of 33.4 per cent.
“Looking at the movement, the August 2024 headline inflation rate showed a decrease of 1.25 percentage points when compared to the July 2024 headline inflation rate.
“However, on a year-on-year basis, the headline inflation rate was 6.35 percentage points higher compared to the rate recorded in August 2023 (25.8 percent).
“This shows that the headline inflation rate (year-on-year basis) increased in August 2024 when compared to the same month in the preceding year (i.e., August 2023).
“Furthermore, on a month-on-month basis, the headline inflation rate in August 2024 was 2.22 percent, which was 0.06 percentage point lower than the rate recorded in August 2024 (2.28 percent). This means that in August 2024, the rate of increase in the average price level is lower than the rate of increase in the average price level in July 2024.”
On food inflation the bureau said: “ The Food inflation rate in August 2024 was 37.52 percent on a year-on-year basis, which was 8.18 percent age points higher compared to the rate recorded in August 2023 (29.34 percent).
“The rise in Food inflation on a year-on-year basis was caused by increases in prices of the following items, Bread, Maize Grains, Guinea Corn, etc (Bread and Cereals Class), Yam, Irish Potatoes, Water Yam, Cassava Tuber, etc (Potatoes, Yam & Other Tubers Class), Palm Oil, Vegetable, etc (Oil & Fats Class) and Ovaltine, Milo, Lipton, etc (Coffee, Tea & Cocoa Class).
“On a month-on-month basis, the Food inflation rate in August 2024 was 2.37 percent which shows a 0.10 percentage point decrease compared to the rate recorded in July 2024 (2.47 percent).
“The fall can be attributed to the decline in the rate of increase in the average prices of Tobacco, Tea, Coco, Coffee, Groundnut Oil, Milk, Yam, Irish Potatoes, Water Yam, Cassava Tuber, Palm Oil, Vegetable etc.”
However, analysts have predicted a renewed inflationary pressure in the coming months due to the current increase in pump price of fuel which, according to them, resulted in an increase in core inflation in August.
Analysts at CardinalStone Research said: “We attribute the deceleration to the food basket, which moderated by 201 basis points (bps) to 37.52 percent Year-on-Year (YoY), largely supported by the onset of the harvest season.
In their September Prism Outlook , analysts at Financial Derivatives Company, FDC, said: “Headline inflation in August was projected to decline, largely attributed to base effects.
“However, the recent hike in petrol prices could renew inflationary pressures in subsequent months, which would exacerbate the cost of living crisis and potentially lead to social unrest.”
