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Inflation inches to 9.1% as economy grows 6.54% Q1

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Nigeria’s inflation, year on year, inched upwards to 9.1 percent in April from 8.6 percent recorded the previous month, National Bureau of Statistics announced yesterday.

This is just as the economy grew by 6.56 percent in the first quarter of 2013 as against 6.34 percent in the corresponding quarter of 2012, and 6.99 in the fourth quarter of 2012. The growth was majorly driven by activities in the non – oil sector.

This is the fourth consecutive month of year-on-year single digit inflation rates being recorded, and the first time this has occurred since the adoption of the new consumer price index (CPI) base period.

Nigeria’s inflation is projected to be lower in 2013 and both the World Bank and International Monetary Fund think it could stay within single digits within the year.

The Bureau said the rise in the headline inflation index was basically as a result of higher price levels of food products due to the effect of declining inventories.

In April, the composite food index increased year-on-year by 10 percent to 145.6 points, 0.5 percentage points higher than the 9.5 percent recorded in March.

On a month-on-month basis, the food index increased by 0.6 percent between March and April.

The largest contributors of the

increase in the food index in April were bread and cereals, potatoes, yams and other tubers, and vegetables, the data office said.

But food prices were higher across all classes in the food sub-index in March.

In April, core inflation, which excludes the prices of volatile agricultural products (but includes “processed foods”) stood at 6.9 percent year-on-year, lower than 7.2 percent recorded in March.

On month-on-month basis, the core index slowed by 0.2 percent from March to April 2013. NBS said all classes of the core index witnessed muted increases coupled with the relative stability in prices of processed foods pulling the overall core sub-index.

“We have observed that the core index has increased generally at a decreasing rate since 2013 which, in addition to base effects, has contributed to slower rises in inflation,” the bureau said.

The average 12 month annual rate of rise of the index was recorded at 12.3 percent for the twelve-month period ending in April 2013, down by 0.7 percentage points from March 2013.

NBS estimates the nominal GDP for the first quarter of 2013 at N9.493779 trillion as against N9.142858 trillion during the corresponding quarter of 2012.

It noted that within the two broad sectors of the economy, the non-oil sector growth was driven by growth in activities in the building & construction, hotels and restaurants, real estate services, manufacturing, finance and insurance, and solid minerals, among others.

The output in the oil sector however, decreased in the first quarter of 2013. The sector contributed about 14.75 percent to real GDP in the quarter, compared to the 15.80 percent, and 12.59 percent in the fourth quarter of 2012 and the corresponding quarter of 2012.

The sector also recorded an average daily production of 2.29 million barrels per day in the first quarter of 2013 based on data obtained from the Nigerian National Petroleum Corporation (NNPC) as against 2.35 million barrels per day in the corresponding quarter in 2012.

“During the period under review, the Nigerian oil sector witnessed some levels of disruptions as a result of pipelnie vandalisation and bunkering incidents with some oil companies such as Eni (Agip) declaring force majeure during the quarter. However, the sector also benefited immensely from the relative stability in international crude oil market price and the exchange rate of naira against the dollar ,” the bureau stated in the report.

The data office noted that the non-oil sector continued to be a major driver of the economy.

The sector recorded 7.89 percent growth in real terms in the first quarter of 2013, however a decline from 8.14 percent in the corresponding period of 2012.

NBS noted that the relative decline in growth is evident in the such activities as agriculture, telecommunications and wholesale and retail trade. On the other hand, manufacturing, hotels and restaurants, as well as building and construction were bright spots for the economy during the reference period.

 

ONYINYE NWACHUKWU