Retail inflation hits 4-month high, factory output rises 4.9%

Lloyd Doyle
June 14, 2018

The Office for National Statistics (ONS) said higher transport costs exerted the most upwards pressure on the Consumer Prices Index measure during May amid steep rises in oil costs this year.

The Reserve Bank of India (RBI) last week raised its benchmark interest rate for the first time since 2014, by 25 basis points to 6.25 per cent, citing inflation concerns.

On a month-on-month basis, the bureau said the Headline Index increased by 1.09 per cent in May, up by 0.26 per cent points from the rate recorded in April.

Besides, the "All items less farm produce" or Core inflation, excluding prices of volatile agricultural produce, stood at 10.7 per cent in May 2018, down marginally by 0.2 per cent from the 10.9 per cent rate recorded in April.

Food price rises eased in May, with inflation coming in at 2 per cent, down from 2.3 per cent in the prior month.

Inflation rate reduces by 0.87% from April.

It said this was the 16th consecutive month that the index would be recording continuous decline.

Nigeria's annual inflation has dropped to 11.61% in May, below the federal government's projection of 12.42% set in the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper.

'Air fares and ferry prices also contributed to the overall increase in inflation due to the timing of Easter. This rise in the index was caused by increases in prices of Potatoes, yam and other tubers, Vegetables, Fish, Bread and cereals, Fruits and Meat.

In the same vein, the urban index rose by 1.10% in May 2018.

According to the report, the corresponding twelve-month year-on-year average percentage change for the urban index was 15.10 per cent in May.

Analysts at German brokerage Deutsche Bank also said they expect a 0.25 per cent rate hike by the RBI at the August review, saying an inflation targeting central bank will feel the need to tighten the policy based on these "signals" from inflation.

In its biannual World Economic Outlook, the International Monetary Fund said economic activity in 2018-19 will be lifted by strong private consumption as well as the fading effects of the withdrawal of high-value currencies and implementation of GST. Yobe State (13.68%) and Jigawa State (13.62%) followed in that order, while Kwara State (8.87%) recorded the slowest rise in price during the period.

Other reports by Iphone Fresh

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