Headline CPI at Highest Since May 2018

• Headline CPI ticked up by 7bps to 12.40% YoY, highest since May 2018
• Core inflation grew by 14bps to 10.12% YoY, highest since August 2018
• Food price index flat at 15.03% YoY

The impact of foreign exchange scarcity and supply chains disruptions became more evident on the core index in the month of May, with core prices reaching the highest level last seen in August 2018. The core index grew by 14bps to 10.12% YoY reflecting the impact of interstate travel restriction on prices of essential items and feedthrough of the Naira depreciation on prices of imported foods and other imported components. Specifically, key components of the core basket expanded, starting with imported food (+2bps to 16.26% YoY), Transport (+32bps to 10.66% YoY), Communication (+13bps to 8.47%), Health (+40bps to 10.66% YoY), clothing (+8bps to 10.40% YoY), amongst others. Elsewhere, while the bountiful harvest during the off season (April and June 2020) kept market well supplied with farm produce largely flat at 15.03% YoY, the supply chain disruptions necessitated increase in prices of processed foods by 11bps to 14.8% YoY.