The National Bureau of Statistics (NBS) has revealed that inflation increased by 12.34 per cent in the month of April.
According to the bureau’s report on its website, “Consumer Price Index, the consumer price index, (CPI) which measures inflation, increased by 12.34 percent (year-on-year) in April 2020. This is 0.08 percent points higher than the rate recorded in March 2020 (12.26 percent).
“On month-on-month basis, the Headline index increased by 1.02 percent in April 2020. This is 0.18 percent rate higher than the rate recorded in March 2020 (0.84 percent).”
The report added that increases were recorded in all COICOP divisions that yielded the Headline index.
NBS said the corresponding 12-month year-on-year average percentage change for the urban index is 12.26 percent in April 2020. This is higher than 12.15 percent reported in March 2020, while the corresponding rural inflation rate in April 2020 is 11.20 percent compared to 11.14 percent recorded in March 2020.
The report said “On a month-on-month basis, the urban index rose by 1.06 percent in April 2020, up by 0.18 from 0.88 percent recorded in March 2020, while the rural index also rose by 0.98 percent in April 2020, up by 0.18 from the rate recorded in March 2020 (0.80) percent.”
According to the report, the percentage change in the average composite CPI for the 12 months period ending April 2020 over the average of the CPI for the previous 12 months period was 11.71 percent, showing 0.09 percent point rise from 11.62 percent recorded in March 2020.
The urban inflation rate, said NBS, increased by 13.01 percent (year-on-year) in April 2020 from 12.93 percent recorded in March 2020, while the rural inflation rate increased by 11.73 percent in April 2020 from 11.64 percent in March 2020.
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The NBS explained that the CPI measures the average change over time in prices of goods and services consumed by people for day-to-day living.
It noted that 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. 3.
“The Rural National index 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 per 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. The survey methodology generates 3774 all items indices for all states and the FCT. “