In May 2024, Nigeria experienced an increase in its headline inflation rate according to the data released by the National Bureau of Statistics on 15th of June, 2024.
On a month-on-month basis, the inflation rate rose by 0.26% to 33.95%, compared to 33.69% in the previous month. On a year-on-year basis, the inflation rate in May 2024 was 11.54% points higher than the rate recorded in May 2023, which stood at 22.41%.
The data also indicated a significant increase in the rates of its components on a year-on-year basis, while showing a slower rate of increase on a month-on-month basis.
- Core Inflation increased by 7.21% to 27.04% from 19.83% in May 2023. On a month-on-month basis, it decelerated by 2.01% from 2.20% in the month of April.
- Food inflation increased by 15.84% to 40.66% from 24.82% in May 2023. On a month-on-month basis, it decelerated by 2.28% from 2.50% recorded in the month of April.
- Rural inflation increased by 10.63% to 31.82%from 21.19% in May 2023. On a month-on-month basis, it decelerated by 1.94% from 1.92% in April 2024.
- Urban inflation increased by 12.61% to 36.34%, from 23.74% in May 2023. On a month-on-month basis, it decelerated by 2.35% from 2.67% in the month of April.
Investment Implications
Operating in an inflationary environment requires careful consideration. Investors must carry out:
- Asset Allocation: Diversify across asset classes to mitigate the impact of risk. Consider inflation-protected securities such as real estate, and commodities.
- Currency Risk Mitigation: Monitor currency fluctuations and hedge against naira depreciation.
- Sector Selection: Some sectors, such as agriculture and energy, may benefit from inflation. However, others, like consumer goods, may face challenges.
- Policy Watch: Stay informed about government policies and central bank actions. Adjust investment strategies accordingly
For more information, click here.