Following the recent increase in import duties on some food item by the Federal Government so as to reduce imports, the prices of a basket of consumer goods have soared across the country.
An analysis of the prices of a basket of consumer goods across the country in April by analysts at FSDH Research showed that prices of some major components of the basket increased considerably.
Consequently, FSDH said the price movements in the consumer goods in April would increase the Consumer Price Index (CPI) to 144.83 points, an increase of 0.58 per cent month-on-month.
Their findings revealed that the average prices of rice increased marginally by about 1.33 per cent on account of pressure from the increase in import duties. The prices of garri and tomatoes both increased by 25 per cent and 5.25 per cent respectively between March and April 2013.
Also, the prices of meat, fish and vegetable oil increased by 12.83 per cent, 6.67 per cent and 0.18 per cent respectively. While the prices of palm oil, onions, beans and yam decreased by 13.33 per cent, 12 per cent, 8.33 per cent and 3.47 per cent respectively.
They added that the observed increase in the prices of food items in April should result to about 0.60 per cent increase in the Food and Non-Alcoholic Index.
“Other consumer items where we noticed increase in their prices in April are recreation and culture, clothing and foot wears, health, education and, restaurants and hotels,” FSDH added.
The analysts added that the increase in the CPI in April would produce an inflation rate (year-on-year) of 9.1 per cent, representing 50 basis points increase from March 2013 inflation rate.
“The April CPI will have to decrease by at least 0.001 per cent from March to produce an inflation rate that is lower than 8.6 per cent reported in the month of March 2013. In our opinion, this is unlikely in the face of increases in the prices of items in the food and non-alcoholic index and the impact of base effects on the inflation rate. Looking into May 2013, our estimate points to a decrease in inflation rate below 9 per cent,” they stated.
Culled from Thisday Live