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Inflation Falls Unexpectedly in December

By on January 19, 2012

In an unexpected development, the Consumer Price Index (CPI) declined in December to 10.3% from 10.5% in the preceding month. This was unusual as the routine hike of prices during the festive periods usually pushes the CPI higher than non-festive periods.

Indeed, according to the National Bureau of Statistics (NBS), inflation related to food prices rose to double digits recording 11%, “after averaging 9.1 percent in the previous six months.”

However the increase in food inflation was counter-weighted by the low increase in the inflation rate of the “All items less farm produce” section.

The report from NBS noted , “The rise in the food inflation was mainly due to the increasing cost of yam, other tubers, cooking oil, meat, fruit, vegetables and beverages. The average annual rate of change of the index was  an increase of  10.3 percent for the twelve-month period ending December 2011.”

“The “All items less Farm  Produce” index which excludes the prices of volatile agricultural products  increased to 10.8  percent year-on-year. This was slightly lower than the 11.5 year-on-year change recorded in November. Month-on-month, the index rose by 0.2 percent in December 2011. The increase was mainly due to increases in transport fares, kerosene and hotel and restaurant charges,” the NBS report stated.

You may view the full report here