February 2023 Inflation review - Inflation rises further amid general elections
Inflation rises further amid general elections
In February, headline inflation accelerated to an 18-year high of 21.91% y/y (Jan'23: 21.82% y/y). The rise was primarily driven by persistent fuel and cash shortages. Headline inflation remained elevated on a month-on-month basis at 1.71% (Jan'23: 1.87% m/m), mainly due to lingering fuel scarcity across the country. However, stable exchange rates, cautious consumer spending, and the absence of new price shocks supported the 16bps slowdown over the previous month.
Food inflation proceeds to a 17-year high
Food inflation increased to a 17-year high of 24.35% y/y (Jan'23: 24.32% y/y), due to higher farmgate prices (+41% y/y). The highest pressures were observed on the prices of oils, bread and cereals, potatoes, yam and other tubers, fish, fruits, meat and vegetables. On the other hand, the food inflation decelerated to 1.90% m/m in February (Jan’23: 2.08% m/m). The slowdown was anchored by lower processed food inflation, highlighting the restrictive impact of the cash crunch and elections on retail trade.
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