In December 2023, the Headline Inflation maintained its upward trend, reaching a new record high to close out the year. On a year-on-year basis, it rose to 28.92% (November 2023: 28.20%), while on a month-on-month basis, Headline Inflation rose by 2.29% in December 2023 (November 2023: 2.09%).

Food Inflation which is the chief driver of Headline Inflation rose to 33.93% year-on-year in December 2023 (November 2023: 32.84%). On a month-on-month basis, it rose to 2.72% (November 2023: 2.42%).

Core Inflation (which includes all items less farm produces and energy) also rose to 23.06% year-on-year in December 2023 (November 2023: 22.38%). On a month-on-month basis, it rose to 1.82% (November 2023: 1.53%).


The Headline Inflation in December 2023 printed lower than our projected figure of 29.05%. We had envisaged a more significant surge in December inflation due to expectation of heightened demand for commodities during the festive season, increased traveling activities amid high fuel prices, and concurrent effect of Naira depreciation.

On Food Inflation, our projection of the lingering impact of subpar harvests persisting into December 2023 held true, as evidenced by the reported figure.

On the other hand, the growth in Core Inflation was supported by the rise in housing, water, gas and electricity tariff contribution from 4.72% in November 2023 to 4.84%.


Looking ahead, we anticipate that the lingering impact of fuel subsidy removal will continue to exert negative impact on Headline Inflation. Additionally, our subdued outlook on the near term strengthening of the Naira leads us to expect a sustained pressure on commodity prices owing to elevated import costs, given that a significant portion of goods in the economy are imported products.

In summary, we hold a pessimistic outlook about a reduction in inflationary pressures in H1 2024. However, we envisage a waning impact of fuel price in the other half of the year as high base effect kicks in.

Click here “December 2023 Inflation – Low Harvests and High Electricity Tariff Sustain Inflationary Pressure” to view the full report.

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