The Consumer Price Index (CPI) which measures inflation increased by 15.75 percent (year-on-year) in December 2020. This is 0.86 percent points higher than the 14.89 percent recorded in November 2020. This is according to the CPI and Inflation report for December released by the National Bureau of Statistics.
The CPI measures the average change over time in prices of goods and services consumed by people for day-to-day living. The price index is constructed from a selection of market basket of goods and services. Every month, 10,534 informants spread across the country provide price data for the computation of the CPI. The market items currently comprise of 740 goods and services regularly priced.
Increases were recorded in all COICOP divisions that yielded the Headline index. COICOP which stands for Classification of Individua Consumption According to Purpose is a reference classification that divides the purpose of individual consumption expenditures incurred by three institutional sectors; namely households, non-profit institutions serving households and general government.
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On month-on-month basis, the Headline index increased by 1.61 percent in December 2020, 0.01 percent higher than the rate recorded in November 2020 (1.60 percent).The percentage change in the average composite CPI for the twelve months period ending December 2020 over the average of the CPI for the previous twelve months period was 13.25 percent, representing a 0.33 percent point increase over 12.92 percent recorded in November 2020.
The urban inflation rate increased by 16.33 percent (year-on-year) in December 2020 from 15.47 percent recorded in November 2020, while the rural inflation rate increased by 15.20 percent in December 2020 from 14.33 percent in November 2020.
On a month-on-month basis, the urban index rose by 1.65 percent in December 2020, same as the rate recorded in November 2020, while the rural index also rose by 1.58 percent in December 2020, up by 0.02 percent above the rate that was recorded in November 2020 (1.56 percent).
The corresponding twelve-month year-on-year average percentage change for the urban index is 13.86 percent in December 2020. This is higher than 13.55 percent reported in November 2020, while the corresponding rural inflation rate in December 2020 was 12.67 percent compared to 12.35 percent recorded in November 2020
Fig 1: CPI Trend from 2009 to Date
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
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