Data released by the National Bureau of Statistics, Nigeria, indicates that the CPI (Consumer Price Index) which measures the changes overtime in the price level of consumed goods and services purchased by households for day-to-day living has slowed down to 11.25% in March 2019. This means that inflation rate has fallen from previous levels.
March 2019 Inflation Rate Has Fallen
According to the statistics, headline inflation, which is the difference in inflation by calculating the prices of a basket of goods bought by consumers, drops to 11.25% in March, 2019 from 11.31% in February, 2019. This is a 0.06% rate difference.
Food inflation drops to 13.45% in March, 2019 from 13.47% in February, 2019; while core inflation, a measure of inflation not including CPI components such as food, energy, fuel, etc., drops to 9.50% in March, 2019 from 9.80% recorded in February 2019.
On month-on-month basis, the Headline index increased by 0.79% in March 2019, this is 0.06 percent rate higher than the rate recorded in February 2019 (0.73%).
What cause the rise in food index?
The composite food index rose by 13.45% in March 2019 compared to 13.47% recorded in February 2019. This rise in the food index was caused by surges in the prices of bread and cereals, meat, Fish, potatoes, yam and other tubers, oils and fats, and soft drinks, vegetables, and fruits.
On month-on-month basis, the food sub-index rose by 0.88% in March 2019, up by 0.06% points from 0.82% recorded in February 2019.
The average annual rate of change of the food sub-index for the twelve-month period ending March 2019 over the previous twelve-month average was 13.42%, indicating 0.20% points from the average annual rate of change recorded in February 2019 (13.62%).
What does this drop in inflation rate mean for the business owner and Nigerian?
Inflation is a threat to the confidence of long-term investors in an economy. It could stifle the economy and also cause a rise in the prevailing interest rates.
Since December of 2018, the figure has been experiencing a gradual fall, meaning that the prices of commodities purchased by households for day-to-day living have been declining. This fall could give a positive value to the local currency, thereby, giving the investors high confidence of making profit in the exchange market.
The drop in the inflation figure in Nigeria for the month of march 2019, is a positive header indicating that the cost of living for the said period is low on an average. The price level of goods and services consumed was stable for the period.