The National Bureau of Statistics has reported that the headline inflation rate for August 2023 increased to 25.80%, compared to the July 2023 rate of 24.08%. This represents a 1.72% point increase between the two months. When considering the year-on-year figures, the August 2023 headline inflation rate was 5.27% points higher than the rate recorded in August 2022, which was 20.52%. This indicates a year-on-year increase in headline inflation for August 2023 compared to the same month in the previous year.
Looking at a month-on-month basis, the headline inflation rate in August 2023 was 3.18%, which was 0.29% points higher than the rate observed in July 2023 (2.89%). This means that, on average, prices in August 2023 were 0.29% higher than in July 2023.
The percentage change in the average Consumer Price Index (CPI) for the twelve-month period ending in August 2023 over the previous twelve-month period was 22.38%. This reflects a 5.31% increase compared to the 17.07% recorded in August 2022.
Regarding urban inflation, in August 2023, the year-on-year rate was 27.69%, which was 6.73% points higher than the rate in August 2022 (20.95%). On a month-on-month basis, the urban inflation rate for August 2023 was 3.29%, up by 0.24% points from July 2023 (3.05%). The twelve-month average for urban inflation in August 2023 was 23.46%, marking a 5.87% point increase from August 2022 (17.59%).
In August 2023, rural inflation was at 24.10% year-on-year, which was 3.98% points higher than the rate in August 2022 (20.12%). On a month-on-month basis, rural inflation for August 2023 was 3.08%, up by 0.34% points compared to July 2023 (2.74%). The twelve-month average for rural inflation in August 2023 was 21.39%, indicating a 4.81% point increase from August 2022 (16.58%).
The food inflation rate in August 2023 was 29.34% year-on-year, which was 6.22% points higher than the rate in August 2022 (23.12%). The increase in food inflation was primarily driven by higher prices for items such as oil and fat, bread and cereals, fish, fruit, meat, vegetables and potatoes, yam and other tubers, vegetable, milk, cheese, and eggs. On a month-on-month basis, the food inflation rate for August 2023 was 3.87%, up by 0.41% points from July 2023 (3.45%). The average annual food inflation rate for the twelve months ending in August 2023 was 25.01%, a 5.99% point increase from August 2022 (19.02%).
Before July, “all items less farm produce” was referred to as core inflation. This was because energy prices, like Petroleum Motor Spirit (PMS), were regulated by the government. However, due to the deregulation of the energy sector and the removal of fuel subsidies, all energy-related items are now determined by market forces, making their prices volatile. Consequently, core inflation is now defined as the all-items index less farm produce and energy.
Core inflation, excluding volatile agricultural produce and energy, stood at 21.15% in August 2023 on a year-on-year basis, an increase of 4.03% points compared to August 2022 (17.12%). The highest price increases were observed in passenger transport by air, passenger transport by road, medical services, vehicle spare parts, maintenance, and repair of personal transport equipment, among others. On a month-on-month basis, core inflation for August 2023 was 2.18%, up from 2.11% in July 2023, marking a 0.07% increase. The average twelve-month annual inflation rate for core inflation was 19.18% for the twelve months ending in August 2023, a 4.38% point increase from August 2022 (14.80%).
It’s important to note that the CPI is weighted according to consumption expenditure patterns, which vary across states and locations. Therefore, comparing consumption baskets between states may be misleading due to these differences.
In August 2023, the highest year-on-year all items inflation rates were recorded in Kogi (31.50%), Lagos (29.17%), and Rivers (29.06%), while Sokoto (20.91%), Borno (21.77%), and Nasarawa (22.25%) had the lowest increases in headline inflation. On a month-on-month basis, August 2023 saw the highest increases in Kwara (6.07%), Osun (4.36%), and Kogi (4.35%), while Sokoto (1.38%), Borno (1.73%), and Ogun (1.89%) had the slowest rises in month-on-month inflation.
Regarding food inflation in August 2023, Kogi (38.84%), Lagos (36.04%), and Kwara (35.33%) had the highest year-on-year rates, while Sokoto (20.09%), Nasarawa (24.35%), and Jigawa (24.53%) had the lowest increases. On a month-on-month basis, food inflation in August 2023 was highest in Rivers (7.12%), Kwara (5.89%), and Kogi (5.80%), while Sokoto (0.50%), Abuja (1.30%), and Niger (1.40%) had the slowest rises in food inflation.