By Babajide Komolafe
LAGOS — The inflation rate, which measures the rate at which prices of goods and services rise, fell to 12.7 per cent in May from 12.9 per cent in April says National Bureau of Statistics, NBS.
The Bureau in its inflation report for May said persistent increase in the prices of some farm produce caused the composite price index, which measures inflation, to rise to 12.7 per cent.
The report said: “The Composite Consumer Price Index, CPI, which measures inflation rose to 12.7 per cent year-on-year in May 2012. The high year-on-year change could be partly attributable to persistent increase in the prices some farm produce due to the farming season, for example vegetables which are typically in short supply at this time of the year.
“Other notable increases were in catering services as well as the cost of some miscellaneous services, such as appliances, articles and products for personal care. However, while these items were responsible for the largest price rises, their contribution to the overall index is minimal given their relatively smaller weights in the index. On a monthly basis, the composite CPI was higher by 0.75 per cent in May 2012 when compared with April 2012.
“The urban inflation rate was recorded at 14.1 per cent year-on-year while the rural inflation rate was 11.7 percent for May 2012. The urban All Items index increased by 0.8 per cent on a month-on-month basis, while the rural index increased by 0.7 percent, when compared with the preceding month.
The percentage change in the average composite CPI for the 12-month period ending May 2012 over the average of the CPI for the previous twelve-month period was 11.1 per cent, the same as the previous month. The corresponding 12-month year-on-year average percentage change for urban and rural indices was 10.5 and 11.6 respectively.
“In May 2012, the level of the Composite Food Index was higher than the corresponding level a year ago by 12.9 per cent. On a month on month basis, average monthly food prices rose in May 2012 by 1.2 per cent. The rise in the food index was mainly from increase in the prices of vegetables (in particular), potatoes, yam and other tubers, and bread and cereals. Farm produce prices have been higher as stocks have been drawn down from earlier harvests and farmers are in the peak of the farming season, using up part of their stocks in the farming process.
The average annual rate of rise of the index remained at 10.4 per cent (year-on-year) for the 12-month period ending May 2012.
“The “All items less Farm Produce” index which excludes the prices of volatile agricultural products rose by 14.9 percent year-on-year, while the average 12 month annual rate of rise of the index was 12.4 percent for the twelve-month period ending May 2012.
On a month-on-month basis, the core index increased by 1.1 percent in May 2012. The rise in the “Core” index could be attributable to higher price levels in divisions that compose the index, such as clothing and footwear, gas and other fuels, transportation, and other class items such as carpets and floor coverings, and education materials.”