National Bureau of Statistics releases consumer price index for the month of March which shows that inflation has marginally increased during the period
| By Maureen Chigbo | Apr. 28, 2014 @ 01:00 GMT
CONSUMER Price Index, CPI, which measures inflation, edged higher in March this year when compared with that of February, according to the National Bureau of Statistics, NBS. Consequently, prices rose by 7.8 percent (year-on-year) in March, marginally higher from 7.7 percent recorded in the previous month. Over the previous six month reporting period, inflation rates have been relatively stable, moving in a choppy fashion.
The NBS figures released on Tuesday, April 15, showed that prices moved in a 0.3 percentage point band ranging between 8.0 percent and 7.7 percent. Between October 2013 and March 2014, food prices have also been relatively stable, moving in a 0.1 percentage band between 9.3 percent and 9.2 percent. In March specifically, prices edged higher to 9.3 percent. Prices were pushed higher as a result of higher prices in the bread and cereals, fish, dairy, oils and fats, and fruits classes. Prices in the food sub-index were, however, weighted down by relatively slower increases in the meats, vegetables, potatoes, and yams and other tubers, classes.
Prices measured by the core sub-index increased at a slower rate in March, after picking up in February. Prices rose by 6.8 percent year-on-year, 0.4 percentage points lower from the year-on-year rate recorded in February. It should be noted that the Headline Index is made up of the Core Index and Farm Produce items. As processed foods are included in both the Core and Food sub-indices, this implies that these sub-indices are not mutually -exclusive.
On a monthly basis, prices increased at a faster rate in March, compared to February. Prices increased by 0.78 percent in March, higher than rates recorded in February by 0.3 percentage points. This was also the prices rose by 6.8 percent year-on-year, 0.4 percentage points lower from the year-on-year rate recorded in February. It should be noted that the Headline
Index is made up of the Core Index and Farm Produce i tems. As processed foods are included in both the Core and Food sub-indices, this implies that these sub-indices are not mutually-exclusive. This was also the highest month-on-month increase recorded in the previous year.
Urban prices increased at a faster rate in March relative to February. Prices increased by 7.9 percent (year-on-year), marginally higher from the 7.8 percent recorded the previous month. Rural prices also increased in March, albeit at a marginally lower rate compared to February. The Rural National CPI recorded a 7.6 percent year-on-year change in March 2014, marginally lower from the 7.7 rate recorded in February. On a monthly basis, price increases in the Urban All-items index eased for the third consecutive month in March, increasing by 0.8 per cent, 0.3 percentage points higher from February. The Rural All Items index also increased further increasing by 0.3 percentage points in March to 0.81 percent. The percentage change in the average composite CPI for the twelve-month period ending in March 2014 over the average of the CPI for the previous twelve-month period was recorded at 8.2 percent, marginally lower from the 8.3 percent average twelve month rate of change recorded in February 2014. The corresponding 12-month year-on-year average percentage change for the urban index was 8.4 percent, while the corresponding rural index was recorded at 8.1 percent recorded in February. The increase in the Core sub-index was as a result of price increases across various class items in particular; Wine, Carpets and other floor coverings; Repair of household appliances, and Fuels and lubricants for personal transport equipment. The average 12 month annual rate of rise of the index was recorded at 7.0 percent for the twelve-month period ending in March 2014, relatively unchanged from the previous 12 month rate of change recorded in February.
The consumer price index, CPI, measures the average change over time in prices of goods and services consumed by people for day-to-day living. The construction of the CPI combines economic theory, sampling and other statistical techniques using data from other surveys to produce a weighted measure of average price changes in the Nigerian economy. The weighting occurs to capture the importance of the selected commodities in the entire index. The production of the CPI requires skills of economists, statisticians, computer scientists, data collectors and others. Key in the construction of the price index is the selection of the market basket of goods and services. Every month, 10,534 informants spread across the country provide price data for the computation of the CPI. The market items currently comprise of 740 goods and services regularly priced. The first stage in the calculation of the CPI is the collection of prices on each item (740 goods and services from outlets in each sector (rural or urban) for each state. Prices are then averaged for each item according to sector across the state. The next step is to use the average price to calculate the basic index for each commodity: The current year price of each commodity is compared with a base year’s price to obtain a relative price. Next we use the Laspeyres formula to compute an aggregated index for each class (which has a multitude of commodities which have similar consumption purposes): Here the sum of the product of weights levels. This may cause variance between a recalculated all items index using the weights published on table 2 and the published all items index because the published weights.