Nigeria’s headline inflation, sometimes called the Consumer Price Index, which measures the rate of price shift in an assortment of food items and other household essentials, will average 12.2 per cent this year multinational professional services firm, PricewaterhouseCoopers (PwC) said on Monday.
Headline inflation leapt 12.4 per cent year-on-year in the month of May in Africa’s largest economy which, alongside four others, is home to half of the world’s people living in extreme poverty because government-imposed measures and economic curbs of the coronavirus lockdown disrupted supply chains and put strain on cost of living.
The figure for April was 12.3 per cent, when it touched its 23-month high, the statistics office said.
“Barring a second wave of the pandemic, which could further threaten outlook for global economic growth, coupled with the absence of major shocks to food supply in Nigeria, inflation outlook for the rest of the year could be influenced by two factors.
“Firstly, the elevated base effect, and secondly, waning household income. The first factor is likely to have a greater impact. Hence, we estimate that headline inflation will average 12.2 per cent in 2020 compared to 11.4 per cent in 2019. This could likely impact the monetary policy objective of price stability,” PwC said in a report titled ‘Demand and Supply Shocks from COVID-19 Keep Inflation Higher for Longer.’
Shocks to the commodity supply chain and the weight of the pandemic outbreak on the economy, PwC said, partly triggered an uptick in headline inflation.
It recommended expansion in the food and agricultural industries, adding that a capable supply chain mechanism should be adopted together with a competent price regulatory system.
Eyes will now be on the Consumer Price Index for June due later this month from the National Bureaus of Statistics.