By Elizabeth Adegbesan

The National Bureau of Statistics, yesterday, said that the annual food inflation rate rose for the 24th consecutive month to 20.75 per cent in October from 20.71 per cent in September, owing to further increases in the prices of basic food items.

The National Bureau of Statistics, NBS, disclosed this in its Consumer Price Index, CPI and Inflation Report for October 2021, saying: “This rise in the food index was caused by increases in prices of food products, coffee, tea and cocoa, milk, cheese and eggs, bread and cereals, vegetables and potatoes, yam and other tubers.”    Consequently, the Food inflation rate has risen by 7.38 percentage points since May 2019 when it dropped to 13.37 per cent.  
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Meanwhile, the NBS report showed that the annual Headline inflation rate continued on its downward trend to 15.99 per cent in October from 16.63 per cent in September, indicating a steady slow down in price increases across the country.    Consequently, the inflation rate has fallen by 2.18 percentage points since March when it peaked at 18.17 per cent, the highest in four years.    

  The NBS said: “The consumer price index (CPI) which measures inflation increased by 15.99 percent YoY   in October 2021. This is 1.76 per cent points higher than the rate recorded in October 2020 (14.23) percent. Increases were recorded in all classifications of individual consumption according to purpose (COICOP) divisions that yielded the Headline index.

  “On a MoM basis, the Headline index increased by 0.98 per cent in October 2021, this is 0.17 per cent points lower than the rate recorded in September 2021 (1.15) percent.

On food inflation, the bureau said: “The composite food index rose by 18.34 percent in October 2021 compared to 17.38 percent in October 2020.

“This rise in the food index was caused by increases in prices of food products, coffee, tea and cocoa, milk, cheese and eggs, bread and cereals, vegetables and potatoes, yam and other tubers.    

“On MoM basis, the food sub-index increased by 0.91 percent in October 2021, down by 0.35 per cent points from 1.26 percent recorded in September 2021.”

  Analysts’ comment

Meanwhile, analysts at United Capital Management Research have projected further decline in the Headline inflation rate to 15.25 per cent for this month.  

They said: “While price pressures like relatively low harvest volumes, chronic supply chain bottlenecks, and limited access to foreign exchange,   through official channels remain significant, we expect disinflation to persist in the short term, as the high base effect on inflation will likely become more prominent in the closing months of 2021.  

“As a result, we forecast the headline inflation rate to print at 15.25 percent YoY in November 2021, 74 basis points lower than the October 2021 print.

“We believe this weakens the case for tighter monetary policy at the forthcoming Monetary policy Committee (MPC) meeting, given our assumption of continued disinflation.”