Nigeria’s inflation continues to rise, with headline inflation reaching 34.19% year-on-year (y/y) in June, up from 33.95% y/y in May. According to analysts at Cordros Capital, this increase exceed estimates of 34.0% y/y. On a month-on-month (m/m) basis, inflation rose by 17 basis points (bps) to 2.31% in June from 2.14% m/m in May.
The primary drivers of this inflationary surge are significant increases in food and housing costs. Food inflation rose by 21bps to 40.87% y/y, compared to 40.66% y/y in May. Key contributors to the rise in food prices include Millet Whole grain, Garri, Guinea corn (Bread and Cereals Class), Yam, Water Yam, Coco Yam (Potatoes, Yam & Other Tubers Class), Groundnut Oil, Palm Oil (Oil & Fats Class), and various types of dried fish such as Catfish, Sardine, and Mudfish (Fish Class). On a month-on-month basis, food inflation increased by 2.55%, up from 2.28% m/m in the previous month.
Housing costs, particularly rents, saw substantial increases, driving up core inflation by 36bps to 27.40% y/y in June from 27.04% y/y in May. Other significant increases were observed in transportation costs, including Journey by motorcycle and Bus Journey intercity (Passenger Transport by Road Class), accommodation services, and various medical services such as consultation fees, laboratory services, and X-ray photography, alongside pharmaceutical products. On a month-on-month basis, the core index rose by 5bps to 2.06% in June from 2.01% m/m in May.
The continued escalation in both food and housing prices underscores the mounting economic pressures facing Nigerian households. These rising costs reflect broader challenges in managing inflation and ensuring economic stability in the country.
Accommodation Service, Consultation Fee of a medical doctor, Laboratory service, X-ray photography, etc (under Medical Services Class) and pharmaceutical products. Compared to the previous month, the Core index surged by 5bps to 2.06% m/m in June (May: 2.01% m/m).
