January 2022 Inflation Rate Witnesses a Marginal Drop

The fall in the monthly inflation rate seems to have resumed; this is following a drop in the headline inflation rate by 0.03 per cent point in January 2022 from the 15.63 per cent recorded in the month of December 2021. The figure is also lower that the 16.47 per cent record in January 2021 by 0.87 per cent point (NBS, 2022). The food inflation, although highest when compared to others, declined by 0.24 per cent point to 17.13 per cent as against 17.37 per cent recorded in the month of December. All other categories increased in rates. For instance, inflation was higher for almost all other categories, primarily clothing & footwear (15.4% vs 15.1%); transport (15.1% vs 15%); furnishings (14.6% vs 14.5%); miscellaneous goods & services (14.4% vs 14.1%) and alcoholic beverages & tobacco (14.1% vs 13.7%). The NBS stated that the food index was driven by increases in prices of Bread and cereals, Food product, Potatoes, yam and other tuber, soft drinks, Oils and fats and fruit.

The urban inflation rate for January, 2022 of 16.17 percent year-on-year which remained the same with December, 2021 rate was a decrease from 17.03 percent recorded in January 2021. The rural inflation rate also decreased to 15.06 per cent in January 2022 from 15.11 per cent and 15.92 percent recorded in December in January 2021, respectively.

The reduction in inflation in the month of January confirms the fact that the mad rush for food items was the main cause of the increased inflation in December, 2021. However, the National Bureau of Statistics released this result with a caveat that the coming months may witness increase in inflation. The signs are already noticed. With the influx of the adulterated fuel and the increase in the price as much as N1,000 in some states, the pass-through relationship between fuel prices, transport and food products will definitely lead to an increase in inflation in the coming months unless something drastic is done to curb the menace and restore normalcy in the sector.

Consumers should continue to exhibit moderacy in their expenditures.