Inflation rate rose by 11.61 percent in October 2019, being 0.36 percentage points higher than the 11.24 percent recorded in September 2019.
The Consumer Price Index (CPI), which measures inflation, released yesterday by the National Bureau of Statistics (NBS) showed that increases were recorded in all divisions that yielded the Headline index.
On month-on-month basis, the Headline index increased by 1.07 percent in October 2019, or 0.03 percentage points higher than the 1.04 percent recorded in September 2019.
The report showed that turban inflation rate stood at 12.20 percent in October 2019 from 11.78 percent recorded in September 2019, while the rural inflation rate was recorded at 11.07 percent in October 2019 from 10.77 percent in September 2019.
On a year on year basis, the composite food index rose by 14.09 percent in October 2019 compared to 13.51 percent in September 2019.
“This rise in the food index was caused by increases in prices of Meat, Oils and fats, Bread and cereals, Potatoes, Yam and other tubers, Fish and Vegetables,” NBS explained.
On a month-on-month basis, the food sub-index increased by 1.33 percent in October 2019, up by 0.03 percentage points from 1.30 percent recorded in September 2019.
Analysis of the report showed that the ‘’All items less farm produce’’ or Core inflation rate, which excludes the prices of volatile agricultural produce stood at 8.88 percent in October 2019 on a year-on-year basis, slower by -0.07 percentage points when compared with 8.94 percent recorded in September 2019.
“The highest increases were recorded in prices of Cleaning, Repair and hire of clothing, Hospital services, Major household appliances, Repair of household appliance, Glassware, tableware and household utensils, and Garments,” NBS reported.
Reacting to the Inflation figures, FXTM Senior Research Analyst, Lukman Otunuga said: “Any remaining hope over the Central Bank of Nigeria cutting interest rates in the near term has been quashed by signs of rising inflationary pressures.
Nigeria’s inflation rate jumped to a 17-month high at 11.6% in October, from the 11.24% seen in September thanks to rising food prices.
Otunuga said the CBN is unlikely to cut interest rates this month due to the uptick in inflation and this sentiment is likely to roll over into 2020.
He said: “Although one of the central bank’s objectives is to achieve price stability, an interest rate cut has the potential to stimulate consumption which accounts for roughly 80% of GDP. Given how the Federal Reserve has signalled a pause on further rate cuts, this may complicate the CBN’s efforts to ease monetary policy in 2020.
“The next major economic release from the Nigerian economy will be the third-quarter GDP figures scheduled for release on Monday 25th of November. Markets are predicting growth to expand 2% during Q3. Should the report disappoint, the CBN could be forced to take action despite the threat of rising inflation.”