Nigeria’s inflation rate has increased again to 33.69% for the fourth time in 2024.
The headline inflation accelerated to a new 28-year high in April, hitting 33.69% year-on-year, up from 33.20% in March.
The development may have set an agenda of likely marginal monetary policy rate (MPR) increase, from the currentl rate at 24.75 percent
Yemi Cardoso, Central Bank of Nigeria Governor told Financial Times at the recent interview that the apex bank and MPC would do anything that is possible to reign in the menace of the inflationary pressures and subsequently, curtail it.
Similarly, strong services have fanned the US producer inflation in April as producer prices increased more than expected in April amid strong gains in the costs of services like portfolio management and hotel accommodation, indicating that inflation remained stubbornly high early in the second quarter, according to Reuters.
The report from the Labor Department on Tuesday also showed wholesale goods prices rising solidly last month, though the cost of food declined. It followed recent surveys showing an increase in inflation expectations, prompting traders to trim bets for a September interest rate cut from the Federal Reserve.
However, according to Nigeria’s National Bureau of Statistics (NBS)’s Consumer Price Index (CPI) report released on Wednesday.
“In April 2024, the headline inflation rate increased to 33.69% relative to the March 2024 head line inflation rate which was 33.20%,” the Bureau said in its report.
Looking at the movement, the April 2024 headline inflation rate showed an increase of 0.49% points when compared to the March 2024 headline inflation rate.
“On a year-on-year basis, the headline inflation rate was 11.47% points higher compared to the rate recorded in April 2023, which was 22.22%.
“This shows that the headline inflation rate (year-on-year basis) increased in the month of April 2024 when compared to the same month in the preceding year (i.e., April 2023).
“Furthermore, on a month-on-month basis, the headline inflation rate in April 2024 was 2.29%, which was 0.73% lower than the rate recorded in March 2024 (3.02%). This means that in the month of April 2024, the rate of increase in the average price level is less than the rate of in crease in the average price level in March 2024.”
But Reuters, quoting Christopher Rupkey, chief economist at FWDBONDS said., “Inflation at the producer level is back on the front burner this month and consumers are sure to feel it.
Speaking further Rupkey said, “If Fed officials were seeking some moderation from the inflation outbreak in the first quarter, it is not showing up at the start of the second quarter.”
Specifically, the producer price index for final demand rose 0.5% last month after falling by a downwardly revised 0.1% in March, the Labor Department’s Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the PPI gaining 0.3% after a previously reported 0.2% rise in March. A 0.6% jump in services accounted for nearly three-quarters of the increase in the PPI. April’s rise was the largest since July 2023 and followed a 0.1% dip in March. In the 12 months through April, the PPI increased 2.2% after climbing 1.8% in March.
Inflation surged in the first quarter amid strong domestic demand after slowing for much of last year. Economists had largely attributed the rise to a combination of businesses raising prices at the start of the year and providers of services like motor vehicle insurance catching up to higher costs. They are optimistic that inflation will resume its downward trend this quarter as the labor market is cooling.
While, one of Nigeria’s foremost Evinomists, and chief executive of the Financial Derivatives Company, Bismarck Rewame predicted about 34 percent inflation figure for April as well as further increase in MPR, Razia Khan, Managing Director, Chief Economist , African and Middle East, Global Research ,Standard Chartered Bank agreed with Rewane on inflation hike but differed on the MPR hike, saying there are positive effects from the last meeting which need to be consolidated
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