For the first time since August 2019, the Nigerian headline inflation dropped to 18.12 per cent in the month of April, to halt a 20-month consecutive rise.
According to the data released on Monday by the National Bureau of Statistics, April inflationary pressure slowed down by 0.05 per cent from 18.17 per cent in March.
The decline was majorly driven by a slower increase in the food index to 22.72 per cent from 22.95 per cent in March on the back of a rise in prices of coffee, tea, milk, bread, cereals, potatoes, yams and other tubers, meat, fruits among others.
Imported food index rose to 16.90 per cent from 16.65 per cent amid the depreciation of the naira at the Bureau De Change and parallel market.
Foreign exchange rates at both the BDC and parallel market rose month-on-month by 0.72 per cent and 0.62 per cent respectively to N478.55/USD and N484.02/USD in April 2021.
Further analysis of the NBS data showed that core inflation rose to 12.74 per cent from 12.64 per cent in March, driven by rise in price of pharmaceutical products, vehicle spare parts, medical supplies, furniture and finishing among others.
On a monthly basis, headline inflation moderated to 0.97 per cent from 1.56 per cent in March amid decline in food inflation to 0.99 per cent from 1.90 per cent in March.
Food inflation moderated despite the worsening security challenges in the country as well as the anticipated decline in food stockpiles, given that farmers are still in the planting season.
Core inflation also fell to 0.99 per cent from 1.06 per cent in March amid decline in clothing and footwear cost as well as flattish in water, electricity, gas and other fuel cost.
Urban and rural annual inflation rates moderated to 18.68 per cent from 18.76 per cent and 17.57 per cent from 17.60 per cent respectively.
“Despite the surprise moderation in inflation rate, we remain cautiously optimistic and expect prices to remain sticky due, in part, to the rainy season and the lingering effect of structural bottlenecks and insecurity. Other factors include probable upward adjustment to electricity tariffs, effect of higher crude oil prices on transport fare as well as likely increase in imported food due to upward pressures on exchange rate,” analysts at Cowry Asset Management said.
