Inflation rose from to 18.17 last month from 17.33 per in February, the National Bureau of Statistics (NBS) Report has said. The Report said the percentage rise was 0.82 higher.
It said: “The consumer price index, (CPI) which measures inflation increased by 18.17 percent (year-on-year) in March 2021. This is 0.82 percent points higher than the rate recorded in February 2021(17.33 per cent).
“Increases were recorded in all Consumer Individual Corruption by Purpose (COICOP) divisions that yielded the Headline index. On month-on-month basis, the headline index increased by 1.56 per cent in March 2021.”
According to the NBS report, the figure 0.02 percentage points higher than the rate recorded in February 2021 (1.54 per cent).
It said: “The NBS noted that on a month-on-month basis, the urban index rose by 1.60 per cent in March 2021, up by 0.02 compared to the rate recorded in February 2021, while the rural index also rose by 1.52 per cent in March 2021, up by 0.02 compared to the rate that was recorded in February 2021 (1.50 per cent).
The report said “the corresponding twelve-month year-on-year average percentage change for the urban index is 15.15 percent in March 2021”.
According to the NBS, this is higher than 14.66 per cent reported in February 2021, while the corresponding rural inflation rate in March 2021 is 13.99 per cent compared to 13.48 percent recorded in February 2021.
The report said increases were recorded in all COICOP divisions that yielded the headline index.
The report reads in part: “The percentage change in the average composite CPI for the twelve months period ending March 2021, over the average of the CPI for the previous twelve months period was 14.55 per cent, representing a 0.50 per cent point increase over 14.05 percent recorded in February 2021.
“The urban inflation rate increased by 18.76 per cent (year-on-year) in March 2021 from 17.92 per cent recorded in February 2021, while the rural inflation rate increased by 17.60 percent in March 2021 from 16.77 percent in February 2021.
“The composite food index rose by 22.95 per cent in March 2021 compared to 21.79 percent in February 2021”.
Speaking on the inflation figure, Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said it was becoming clear that price inflation is not transient but is now more persistent.
He said a decomposition of the contributing factors shows a much more composite set of drivers ranging from higher costs of refined petroleum products (12.07 per cent) to an exchange rate pass through to consumers and the impact of high powered money with a shorter transmission time lag into the markets.
Rewane said: “This time, all segments and baskets deteriorated showing that the impact of government interventions is falling far short of expectations in spurring output. Also that money supply growth (1.41 per cent) is compounding the demand pull effect on the general level of prices.
“Total agric intervention was N1.487 trillion (0.78 per cent of Gross Domestic Product), which is not only inadequate nominally but will also have a very limited multiplier effect on aggregate output.”
“The steep rise in inflation will be one of the major considerations at the MPC meeting next month. Majority of the committee members are more likely to vote in favour of a tighter monetary policy stance this time.
“As interest rates rise, the marginal propensity to save is likely to increase, reducing liquidity and tapering inflation.”