In contrast to our expectation of 21.30% YoY, inflation edged higher to 21.82% YoY in January 2023 (vs. 21.34% YoY in December 2022) as reported by the National Bureau of Statistics (NBS). This represents a reversal of the one-time disinflation recorded in December 2022 and the highest rate recorded since September 2005. Both component indexes contributed to the uptick in headline inflation. The food index grew by 24.32% YoY (vs 23.75% YoY in December 2022), driven by the increase in prices of bread, cereals, potatoes, fish, oil and fat, yam, and other tubers. Similarly, the core sub-component of the index rose by 19.16% YoY (vs. 18. 49% YoY in December 2022) due to the increased cost of gas, liquid and solid fuel, vehicle spare parts, fuels and lubricants, and transportation by air. On a month-on-month (MoM) basis, the food and core indexes rose faster by 2.08% and 1.82%, respectively, compared to 1.89% and 1.33% in December 2022. The pressure on price level is sustained despite the consistent rate hikes to combat inflation.
