Don't Miss


Home   >   Business   >   Industries   >   Economy   >   Inflation drops to 8.1% in October

Inflation drops to 8.1% in October

By on November 11, 2014

The Consumer Price Index (CPI) which measures inflation dropped further to 8.1 per cent in October compared to 8.3 per cent the previous month, according to the National Bureau of Statistics (NBS).

Also, Nigeria’s Capital Importation portfolio increased by 12.73 per cent or $738.69 million to about $6.54 billion in the third quarter of the year compared to about $5.8 billion in the second quarter of 2014, the statistical agency said.

It attributed the weakened pace of price increases to “a slower rise in all Classification of Individual Consumption by Purpose (COICOP) division  that yields the headline index.”

The NBS, in its latest CPI figures released yesterday stated that the food index rose by 9.3 per cent (year-on-year) in October, down by 0.4 percentage points from 9.7 per cent recorded in September.

“This is the second consecutive month where advances in food prices have been relatively muted. The ease in the increase in food prices was as a result of slower increases in all groups that contribute to the sub- index. Price movements recorded by the all items less farm produce or core sub- index moved at the same pace for the third consecutive month at 6.3 percent (year-on-year), holding for the lowest rate increases recorded this year. While muted price increases were recorded across most divisions and groups that yielded the core index, there were increases in catering services, fuels and lubricants for personal transport, and Non-durable household goods,” it stated.

Meanwhile, year-on-year, the pace of increase of both urban and rural prices, eased for the second consecutive month in October as urban inflation rose by 8.1 per cent, down from 8.4 per cent in September, while the rural composite CPI rose by 8.0 per cent in October, down from 8.2 per cent in the previous month.

On a month on month basis, urban prices have increased at the same pace for the previous three consecutive months: by 0.5 per cent while the pace of increases in the rural all-items index eased, increasing by 0.5 per cent, down from 0.6 percent in September.

However, the NBS, in its quarterly capital importation statistics also released yesterday noted that despite the steady rise in inflows observed throughout 2014, the cumulative total of about $16.2 billion within the year still fell short of the cumulative total of about $16.6 billion realised in 2013.

Portfolio investment remained the largest at about $5.1 billion making up 78.38 per cent of the third quarter total. But that represented a decline in its share of 6.35 per cent from the 84.72 per cent it represented in the second quarter while other investments, accounted for at $870.33 million, made up 13.30 percent of total capital imported for the quarter, up 6.17 per cent from the 7.13 per cent of the total that it represented in the previous quarter.

Foreign direct investment (FDI) recorded the smallest contribution in the quarter at $544.21 million or 8.32 per cent of the total, marginally expanding its share from the 8.15 per cent recorded in Q2.

Lagos State continued to expand its share as it accounted for the greatest inflows of capital, with about $6.4 billion or 98.91 per cent of the third quarter 2014 total.

 

According to the NBS, ”From the $5,707.54 million recorded in the previous quarter, capital importation increased by $763.99 million or 13.39 per cent, and was up by $2,120.48 million or 48.74 per cent year on year. Subsequently, the state drove almost all growth in capital imported both quarterly and year on year.
“However, this was not the case prior to 2014. From the peak of $6,524.73 million recorded in Q1 of 2013, there was a steady decline in inflows to Lagos State throughout that year, reaching a low of $3,758.07 in Q1 of 2014. This pattern mirrors that of the overall capital imported. Despite the steady increases in importation of capital to the state throughout 2014, the amount imported in the third quarter was still $53.20 million or 0.82 per cent less than the value received in the opening quarter of 2013.

 

“Of the remaining 1.0 per cent of total capital imported in Q3 of 2014, the majority of the share was taken by Delta State, with $50.00 million or 0.76 per cent of the total imported in the quarter. This was a stark increase, with zero capital imported in the previous quarter, and just $0.15 million in the corresponding quarter of 2013, which therefore represented an increase of $49.85 million or 33,241.11 per cent year on year. Abia State held the third largest share, with $9.71 million imported, making up 0.15 per cent of the total. The state had never recorded capital importation in the past.
“The state with the largest recorded absolute declines, however, was  Federal Capital Territory (FCT) Abuja, which from the 0.63 per cent and second largest share that it held in the quarter just one year previous, had declined to just 0.01 per cent of total capital imported in Q3 of 2014. The $0.35 million imported was $3.01 million or 91.20 per cent less than the $3.97 million recorded in the preceding quarter, and represented negative year on year growth of $27.39 million or 98.74 per cent from the $27.74 million recorded in the corresponding 2013 quarter. The greatest value recorded for over the last two years however, was $88.32 million in Q1 of 2014.”

 

[ThisDay]